Enron woes send Nikkei tumbling


Traders were expecting a boost from the royal birth in Japan, but Enron's collapse took center stage on the market Monday

TOKYO, Japan -- The collapse of U.S. energy trader Enron Corp weighed heavily on Japanese banking stocks Monday, sending the Nikkei index down more than 3 percent.

Tokyo's sharp selloff of banking and tech stocks saw it become Asia's worst performer on the day.

Its performance was in sharp contrast to Taiwan, where confidence after the weekend election sent the market soaring almost 5 percent.

Instead of the expected boost from the birth at the weekend of a royal princess, Japan's market focused on weak economic data and Enron's woes

Japanese banks such as Mizuho Holdings and UFJ tumbled after Enron filed for Chapter 11 bankruptcy protection on Sunday.

UFJ down almost 10 percent

UFJ, whose asset management affiliate holds bonds issued by Enron, lost 9.8 percent to 367,000 yen, while Mizuho was down 6.1 percent to 291,000 yen.

Sumitomo Mitsui, the second-largest bank in Japan, dropped 4.93 percent to 637 yen, despite a statement from the Financial Services Agency that exposure of the country's major banks to the entire Enron group was less than 100 billion yen ($810 million).


Sony and other technology stocks were weaker, in line with U.S. moves

Technology stocks were also weaker, with Fujitsu, Toshiba, Sony among those to emulate the slide in their U.S. counterparts.

The benchmark Nikkei 225 average fell 326.82 points or 3.06 percent to 10,370.62 by the close, while the broader capital-weighted TOPIX index lost 20.81 points or 1.98 percent to 1029.41.

In Hong Kong, the Hang Seng index was down 119 points or about 1.1 percent to 11,155.

Weighing on the index was banking giant HSBC Holdings, which fell 1.85 percent to HK$92.75, tracking falls in its sector peers in London on concerns over their exposure to Enron.

Australia, NZ weaker

The same applied to Australia, where most of the big banks were lower on Enron's woes. But resources giant BHP Billiton rose half a percent to A$10.10 after it said it would invest in a new coal mine.

Australia's S&P/ASX200 lost 8.7 points or 0.26 percent to 3328.8, while in New Zealand, the Top 40 dropped 33.91 points or 1.63 percent to 2041.16.

In Singapore the Straits Times index was up 9.85 points or 0.6 percent in late trade to 1488.39.

In Seoul, the Kospi was down for most of the day, but recovered by the close to be up 6.77 points or 1 percent to 650.66.

News that embattled chipmaker Hynix Semiconductor was talking to rival Micron Technology about a possible strategic alliance sent its stock soaring the maximum 320 won or 14.9 percent to 2465 won.

Market heavyweight and Hynix rival Samsung Electronics put on 3 percent to 224,500 won, while mobile telco leader SK Telecom was off 2.3 percent or 6000 won to 258,000 won.

Royal birth not enough

In Tokyo, traders said the birth of a daughter to Crown Princess Masako on Saturday was a supportive factor for sentiment Monday, but was not enough to outweigh concerns about Enron and the dismal outlook for the domestic economy.

The government is to release preliminary July-September gross domestic product data on Friday, with the figure expected to confirm Japan has entered its fourth recession in a decade.

. "The birth is surely a bright piece of news, but it is unlikely to boost the economy, which as we all know is in a very weak state," Masaru Kazama, head of equities at Nissan Securities, told Reuters news agency.

Investors moved to take profits on recent gains in baby-related shares, with stroller and car seat maker Combi Corp sliding 21.15 percent to 820 yen and baby wear maker Kimuratan plunging 21.19 percent to 93.

Toshiba, Japan's top producer of chips, lost 3 percent to 510 yen after the U.S. Nasdaq gave up 0.14 percent and the Philadelphia Semiconductor index fell 2.67 percent.

Consumer electronics giant Sony was down 100 yen or 1.72 percent to 5710 yen. Phone giant NTT slipped 5.69 percent to 481,000 yen, while its mobile phone subsidiary NTT DoCoMo lost 1.86 percent to 1.58 million yen.

NTT and NTT DoCoMo, two of Japan's largest issues by market capitalization, came under pressure after Standard & Poor's late on Friday lowered its long-term ratings on them to AA-minus.

Second-ranked telco KDDI was also off by 3.24 percent to 299,000 yen but No.3 Japan Telecom put on about 1 percent to 434,000 yen.

Dentsu, the world's fourth-largest ad agency, was bid-only with no sellers at 520,000 yen. A mistaken order at 405,000 yen by UBS Warburg marred Dentsu's Friday debut on the Tokyo Stock Exchange, after it opened at 420,000 yen.

Reuters contributed to this report.