MW: Tokyo stocks snap 3-day rally to lead region lower
By V. Phani Kumar, MarketWatch
HONG KONG (MarketWatch) -- Japanese stocks tumbled, leading lead Asian markets lower Wednesday, with exporters such as Nikon Corp. hit by a strengthened yen, while banking giant Mitsubishi UFJ Financial Group slumped on a report that it has decided to cut its half-yearly profit forecast.
The Nikkei 225 Average tumbled 5.1% to 8,828.54 in afternoon trading, while the broader Topix index gave up 5.3% to 905.94. Both benchmarks reversed direction after a three-day winning run.
The regionwide decline came after sharp losses on Wall Street overnight, in the wake of missed earnings reports and bleak forecasts from Texas Instruments Inc. , Sun Microsystems Inc. It's basically because of liquidation pressure" from funds, said Yoji Takeda, head of regional equities at RBC Investment in Hong Kong. "Trading volumes are still thin and it seems buyers aren't around."
Shares of Mitsubishi UFJ Financial Group declined 7.9% after the Nikkei business daily said the banking giant has decided to cut the net profit forecast for the fiscal first half ended September 30 from the 270 billion yen ($2.7 billion) figure it had projected earlier. The half-yearly profit figure is expected to be around 100 billion yen because of write-downs, though it could still change by tens of billions of yen, the Nikkei added.
Exporters also dropped sharply, reacting to a strengthened Japanese currency, as the U.S. dollar straddled the 100 yen level.
Shares of Canon Inc. shrank 3.8%, Nikon Corp. tumbled 8.6% and Honda Motor Co. declined 4.9%.
Toyota Motor Corp. stock lost 3.2%, after the Nikkei reported that the company's 2008 sales were expected to drop 2% from the previous year, marking the first year-on-year decline in a decade.
Shares of NEC Electronics Corp. slumped 19.9% after the company cut its earnings outlook for the current financial year Tuesday.
In Asian currency markets, the U.S. dollar recently bought 99.65 yen, compared with 100.98 yen late Tuesday.
Elsewhere in Asia, the Hang Seng Index lost 2.4% to 14,676.96 in Hong Kong, China's Shanghai Composite dipped 1% to 1,939.63, Australia's S&P/ASX 200 index gave up 2.8% to 4,183.70 and South Korea's Kospi dropped 2.2% to 1,170.03.
New Zealand's NZX 50 index lost 1.5% to 2,908.09, Singapore's Straits Times index fell 3% to 1,862.70 and Taiwan's Taiex dropped 1.3% to 4,879.05
India's Sensitive Index, or Sensex, lost 2.4% to 10,430.34 in early trading.
Regional detail
In Sydney, shares of BHP Billiton dropped 4.9%, after surging more than 10% in the previous session. The decline came on an overnight drop in crude-oil prices, and after the mining giant said in its quarterly production report that demand from China hasn't been immune to a global slowdown and that it expects "volatility and uncertainty to continue in the short-term."
In Hong Kong, shares of Cnooc lost 4.7% while PetroChina Co. shrank 3.9% in Hong Kong and 2.9% in Shanghai.
Shares of energy traders dropped sharply in Tokyo, with Marubeni Corp. losing 7.8% and Mitsubishi Corp. shedding 7.1% in Tokyo.
December crude-oil futures dropped as much as $1.09 to $71.09 a barrel in electronic trading, after falling $2.21 to $72.18 a barrel on the New York Mercantile Exchange overnight. December futures became the front-month contract after the contract for November delivery expired at $70.89 a barrel on the Nymex, down $3.36.
Shares of Citic Pacific dropped 10.3%, on top of their 55% slump Tuesday, after the company said it could suffer up to $1.9 billion in foreign exchange losses. The extended decline came after ratings agency cut Moody's Investors Service Tuesday cut the company's ratings by a notch and placed them on review for a further possible downgrade.
Shares of Jiangxi Copper Co. a day after mainland China's largest copper producer reported a 26.9% drop in third-quarter net profit.
In Seoul trading, shares of Samsung Electronics Co. dropped 1% in a weak market after the company said late Tuesday that it has pulled its acquisition offer for chipmaker SanDisk Corp. , citing a lack of progress in merger talks and "growing uncertainties" about SanDisk's business amid the economic downturn. See full story
On Wall Street, the Dow Jones Industrial Average ell 2.5% to 9,033.66. The Nasdaq Composite tumbled 4.1% to 1,696.68, while the S&P 500 index ave up 3.1% to 955.05.
