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Tuesday September 18, 12:55 PMNikkei down but off lows, banks hit by credit fearsTOKYO, Sept 18 (Reuters) - Japanese stocks pulled back from earlier lows by midafternoon on Tuesday, with the benchmark Nikkei average down 1.6 percent as growing global credit fears hit banks such as Mizuho Financial Group . Financial firms came under additional pressure after middle-ranked firm Credia Co became Japan's first licensed consumer lender to fold, leading to selling of peers such as Aiful Corp .A rush of savers withdrawing deposits at large British mortgage lender Northern Rock raised fears of spreading global credit market turmoil. "The issue of Northern Rock suggests that the roots of the subprime lending problem may be deep, leading to worries about other major global banks," said Norihiro Fujito, a general manager in the investment research and information division at Mitsubishi UFJ Securities. "This is leading investors -- both domestic and foreign -- to lighten the weighting of financial shares in their portfolios, and Japanese banks are not immune, even though any direct impact of the subprime issue on them is limited." The benchmark Nikkei was down 1.6 percent at 0454 GMT, or 261.26 points, at 15,866.16. It had earlier fallen as slow as 15,816.93. The broader TOPIX index briefly fell more than 2 percent in morning trade but recovered slightly and was down by 1.8 percent, or 27.60 points, at 1,517.11. The overall mood was prompting investors to sell to cut losses, leading to a chill in sentiment across the board. While the market is keenly waiting for the results of a meeting of the U.S. Federal Reserve later on Tuesday, a cut in the benchmark federal funds rate of 25 basis points has largely been factored in, meaning the impact of the decision may be limited. Mizuho Financial was down 6.9 percent, a two-year intraday low, with shares at 611,000 yen. Sumitomo Mitsui Financial Group was down 5.4 percent at 778,000 yen and Mitsubishi UFJ Financial Group down 4.13 percent at 997,000. Aiful dropped 10.4 percent to 1,843 yen. Canon Inc bucked the overall downward trend to rise 2 percent, to 6,100 yen, after the company said on Friday it would buy back up to a further 50 billion yen worth of its own shares, bringing the total of repurchased stock this year to about $3.9 billion. [ID:nT108102] |
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