Nikkei closes higher, but banks slump


Consumer electronics giant Sony made good gains Tuesday

TOKYO, Japan -- Tokyo stocks were mixed by the close Tuesday, with big banks sharply weaker on Enron-related pessimism, but some technology stocks making a strong showing.

Other markets in Asia were also mixed. Hong Kong, Taiwan and Singapore made good gains, but Australia and New Zealand weakened.

The benchmark Nikkei 225 average closed 82.03 points or 0.79 percent higher to 10,452.65, after sinking as low as 10,356 during the day. That followed on from Monday's sharp 3 percent fall.

The broader capital-weighted TOPIX index was just into the red, down 0.91 points to 1028.50.

Gloomy picture for Japanese banks

Heightened optimism in parts of the technology sector helped offset the gloom among Japanese banks, weighed down by worries about their possible exposure to the collapse of U.S. energy trader Enron Corp.


Despite the celebrations for last Saturday's royal birth, Japanese banks were in a gloomy mood Tuesday

Mizuho Holdings, the world's biggest bank by assets, was off more than 7.5 percent to close at a record low of 269,000 yen. Mizuho shares are now down 72 percent from their intraday high of 964,000 yen marked in October 2000.

Rival UFJ lost 6 percent to 345,000 yen -- also a record low.

Sumitomo Mitsui Banking Corp, Japan's second-largest bank, gave up 7 percent to 592 yen. It said its exposure to Enron totaled $210 million.

Mitsubishi Tokyo Financial Group lost 2.74 percent to 815,000 yen after Monday's announcement that Bank of Tokyo-Mitsubishi had loan exposure to Enron and its related businesses of $247 million.

The banking sub-index was at its lowest level in almost 18 years.

Among techs, Fujitsu and Canon made modest gains, while NEC, Toshiba and Hitachi lost ground. Consumer electronics giant Sony recovered from a soft start to be up 140 yen to 5850 yen.

Telcos recover from soft opening

Telcos initially were softer, but picked up in afternoon trade with NTT DoCoMo up 1.27 percent to 1.6 million yen by the close. KDDI also pulled into the black, up 1000 yen or 0.33 percent to 300,000 yen.

Third-ranked Japan Telecom was also marginally higher at 435,000 yen. But telco giant NTT stayed in the red, down 3.3 percent or 16,000 yen to 465,000 yen.

Automakers were slightly weaker. Market leader Toyota Motor made early gains to 3140 yen, then eased to be 2.9 percent lower to 3040 yen. Nissan was off 2.7 percent and Honda was down about 1 percent.

Elsewhere in the region, Australia's S&P/ASX200 was off marginally, down 4.4 points or 0.13 percent to 3324.4.

Market heavyweight News Corp lost 28 cents or 1.9 percent to A$14.24, but most resources stocks and banks were higher. The central Reserve Bank of Australia is expected to cut interest rates Wednesday morning.

New Zealand's Top 40 was off 13.1 points or 0.64 percent to 2028.06.

In Seoul, the Kospi was down just in the red, off 0.76 points to 649.90.

Chipmaker Hynix jumps again

Chipmaker Hynix Semiconductor continued to soar after announcing Monday it was talking to rival Micron Technology about a possible strategic alliance. It added 195 won or 7.9 percent to 2660 won after its sharp gains Monday.

Taiwan was strongly into the black, with its Taiex finishing a robust 119.82 points or 2.6 percent to 4766.43. UMC was a good performer, up 5.8 percent to T43.50.

Taiwan's stock market has added more than 7 percent since elections at the weekend gave investors more confidence about the island's relationship with China.

Hong Kong's Hang Seng was also sharply higher, closing up 272.13 points or 2.4 percent to 11,427.28.

China Mobile (HK), which said it was looking at buying eight mainland networks from its parent, rose 2 percent to HK$27.60. Conglomerate Hutchison Whampoa added 2.5 percent to HK$72.50

Singapore's Straits Times index was up 39 points or 2.6 percent to 1533 near the end of the day's trading. Leading bank DBS was up 4.2 percent to S$12.20.

In Tokyo, the poor performance of banking stocks followed Wall Street's downturn Monday on worries about the Mideast conflict and the Enron collapse.

The Dow Jones industrial average finished Monday at 9763.96 for a loss of 87.6 points or 0.9 percent. The Nasdaq composite lost 25.68 points or 1.33 percent to 1904.90.

Another factor weighing on Tokyo is the expectation of weak economic data later this week. The Japanese government will release preliminary gross domestic product figures for the September quarter on Friday, with the figure expected to confirm Japan has entered its fourth recession in a decade.

During the midday break Tuesday, Moody's Investor Service cut Japan's yen-denominated debt rating by one notch to Aa3. Its action came a week after Standard & Poor's and Fitch lowered their ratings on Japan.

Reuters contributed to this report.