Tokyo firms, but bank stocks weak

Computer and chipmaker NEC was among Japanese tech stocks to make gains Thursday

TOKYO, Japan -- Tokyo stocks firmed by midday on Thursday, but investors kept clear of the banking sector.

Big banks hit new year-to-date lows on concerns over the weakening economy, but lower-priced issues such as heavy machinery maker Kawasaki Heavy Industries made gains.

The benchmark Nikkei ended the morning up 102.43 points or 0.80 percent at 12,925.88. The broader TOPIX index was 0.93 points or 0.07 percent firmer at 1,273.66 by midday.

Elsewhere in the region, Australia's benchmark S&P/ASX200 index recovered from early losses to be up 5.1 points to 3994.5.

It was bolstered by a rebound in heavyweight telco Telstra, which picked up 2.4 percent to be at A$5.83 after losing about 15 percent on Tuesday and Wednesday.

Korea up, but Hong Kong loses ground

Korea's Kospi was also up, gaining 8.3 points to 607.02, but Hong Kong and Taiwan were in the red.

In Japan, Mizuho Holdings, the world's largest banking group by assets, ended the morning 3.96 percent lower at 509,000 yen.

Earlier, Mizuho dipped to a new lifetime low of 506,000 yen, helping send the sector subindex down 2.8 percent to 279.09, its lowest point since the height of the nation's credit crisis in October 1998.

Mitsubishi-Tokyo Financial Group, third-ranked among Japan's "Big Four" banking groups, hit a new record low of 999,000 yen before ending the morning down 4.72 percent at 1.01 million yen.

"Weak sentiment in the market always hits bank shares most," said Yasuo Sakuma, senior fund manager at Dai-Ichi Kangyo Asset Management.

Some high-techs on the slide

Several high-tech stocks lost ground, led by top fibre-optic maker Furukawa Electric Co Ltd's 4.89 percent loss to 1,090 yen, hurt by the technology-laden U.S. Nasdaq's fall by more than two percent on Wednesday.

But Japan's top chip maker Toshiba, which has fallen steeply in past weeks, gained 2.22 percent to 644 yen after hitting a three-month low of 633 on Wednesday.

Chip and computer maker NEC Corp managed to rebound from a three-month low of 1,731 marked the previous day to firm 0.8 percent to 1,754 by midday on Thursday.

Investors worried by weak GDP figures

Investor sentiment has been dampened by worse-than-expected government data this week that showed Japan's gross domestic product contracted 0.2 percent for the January-March quarter.

Kawasaki Heavy jumped 9.52 percent to 184 yen and trading house Nichimen Corp soared 6.91 percent to 201, a three-year high.

Analysts said investors are seeking such stocks with liquidity due to growing hopes for a further credit easing by the Bank of Japan. The BOJ has started its two-day policy-setting meeting on Thursday.

Reuters contributed to this report.