<<TOKYO, Oct 4 (Reuters) - Tokyo shares are likely to remain under pressure after a weekend meeting of the Group of Seven industrialised nations failed to produce fresh incentives that would boost the beleaguered market, traders said on Sunday.
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Last week was a grim one for the market, with the benchmark Nikkei average down 500.15 points, or 3.6 percent, at 13,223.69. On Friday, the index slid below the 13,000 level for the first time since January 1986 amid intensifying worries of a global equity slide. ''Tokyo shares are looking for the bottom this week amid growing fears of a financial crisis, with no bottom in sight yet,'' said Higashida.
Corporate earnings both here and abroad will catch traders' attention, and with the global economy perhaps on the brink of a slump, many think the earnings announcements will disappoint. That could help push down blue-chip Japanese shares such as Sony Corp and Toyota Motor Corp . ''Blue chips and export-related firms are also likely to be sold due to signs that the U.S. economy is slowing,'' said Koichi Kurata, portfolio manager at Asahi Mutual Life Insurance Co.
Many fret that Japan may experience another wave of year-end bankruptcies caused by a credit crunch as banks reduce lending to prop up their capital-adequacy ratios. ''There are few sectors for investors to be able to buy at this stage except for selected defensive stocks such as pharmaceuticals,'' Kurata said.
Uncertainty over how much money Japan will commit to help its shaky banks will undermine confidence in the market. The lower house of Japan's parliament on Friday passed a set of financial-stabilisation bills designed to wind up failed banks and temporarily nationalise those that fail or request nationalisation. But still unresolved are measures to handle weak banks before they fail. The bills still need to be approved by the upper house before they become law. The upper house's plenary session is to take up the bills on Monday.
Other factors in the market:
*The meeting of G22 finance ministers and central bank governors in Washington on Monday.
*The release of the government's revised GDP forecast for fiscal 1998/99.>> |
