Tokyo's Nikkei tumbles below 12,000

By staff and wire reports

TOKYO, Japan -- Tokyo stocks continued to tumble Wednesday, with the Nikkei dropping through the key 12,000-point barrier before midday.

Despite the broad gains on Wall Street on Tuesday, technology stocks led the Japanese market down.

The benchmark Nikkei 225 average was down 175.8 points or 1.45 percent at 11,952.77, while the capital-weighted TOPIX index fell 1.48 percent to 1,205.84.

It was the first time the Nikkei had been below 12,000 since March 15.

Elsewhere in the region, the Australian and New Zealand markets stayed stronger, but Korea and Taiwan were both down.

In Seoul, where the market was closed Tuesday for a national holiday, the Kospi was down 4.34 points to 544.55 just before midday Wednesday.

Taiwan's Taiex was down 113 points to 4258.17.

Traders expect losses to be limited

Japanese high-tech issues such as Toshiba slipped as investors focused on after-hours earnings in U.S. chip giant Intel Corp.

Intel beat already-lowered expectations, but sales fell 24 percent and the stock dropped in after-hours trade.

Traders said losses in Tokyo shares would likely be limited, with investors waiting for more U.S. earnings results this week.

"With results from IBM and other big high-tech companies hovering just ahead of us, investors cannot go to extremes. This is likely to be another day of slow trade," said Hiroichi Nishi, a general manager at Nikko Securities.

Mobile phone giant NTT DoCoMo was down 7.2 percent to 1.81 million yen. Chip stocks were mostly lower. Top chipmaker Toshiba Corp fell 1.7 percent to 591 yen while NEC Corp lost 1.38 percent to 1,576 yen.

In the U.S., Intel, the world's largest semiconductor maker, posted a 76 percent drop in quarterly profits -- a surprise for analysts who were, on average, expecting worse results.

Jump for Softbank Investment

But the company's outlook gave investors little reason to be optimistic. Intel forecast third-quarter sales of $6.2 billion to $6.8 billion, compared with $6.3 billion in the second quarter.

Venture capital company Softbank Investment Corp jumped 9.2 percent to 1.78 million yen after the subsidiary of Internet investor Softbank Corp said on Tuesday it planned to carry out a three-for-one share split for shareholders registered as of September 30.

Reuters contributed to this report.