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Banks drag Tokyo market lower


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UFJ is down sharply Monday on a report about its bad loan position.

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(CNN) -- A big fall in banking stocks is weighing on the Japanese market in Monday trade.

Despite solid gains for consumer electronics leader Sony and other blue-chips such as Canon, the Nikkei 225 has slipped deep into the red at the end of the morning session.

It is down 1.52 percent to 11,645.34. The broader Topix is down even more sharply, off 2.13 percent to 1170.65.

Banks are tumbling, led by a fall of 12 percent-plus for UFJ and 7.6 percent for Mizuho.

That follows a weekend report in the Japanese media that UFJ may have more problem loans than previously thought. (Full story)

Japan's market opened a touch higher on optimism about corporate results, before starting to decline.

On Friday the Nikkei had closed with a small gain of 0.2 percent, following Thursday's plunge of almost 300 points that took it to its lowest level in two weeks.

Sony is up 1.14 percent to 4420 yen and Canon is 0.56 percent ahead to 5400 yen. Hitachi has given up early gains to be down 0.9 percent to 780 yen.

Toyota and Nissan were also in the black in early trade, but have fallen into the red. Toyota is down 1.3 percent to 3870 yen.

The big banks are posting the biggest falls on new concerns about their level of bad loans.

UFJ is down 12.1 percent to 621,000 yen, Mizuho is off 7.6 percent to 472,000 yen and there are falls of 6.5 percent for SMFG and 4 percent for MTFG.

Mobile phone operator NTT DoCoMo is also in the red, off 1.3 percent to 223,000 yen.

The dollar is trading at 107.97 yen in Tokyo at midday Monday.

Investors in Asia are weighing the likelihood of an interest rate increase in the United States, and political fallout from Israel's weekend killing of Hamas leader Abdel Aziz Rantisi.

South Korea lower

Elsewhere in the region, South Korea, Hong Kong and Taiwan are down, while Singapore, Australia and New Zealand are all slightly higher. But most moves are muted.

In Seoul, the Kospi has given up early gains to be 0.7 percent lower at 892.28, dragged down by a 3 percent drop for Hyundai Motor and a smaller fall for market heavyweight Samsung Electronics.

In Australia, the S&P/ASX200 is 0.2 percent ahead to 3423.3, with a gain of 1.2 percent for News Corp. and 0.8 percent for resources leader BHP Billiton.

In Taiwan, the Taiex is 0.45 percent lower to 6787.83. Market leader TSMC is down 1.6 percent to T$60.00 and Formosa Plastic is off 2.7 percent to T$54.00.

Singapore's Straits Times index is just in the black, up 0.04 percent to 1854.8. Singapore Airlines is steady and DBS Bank is up 0.7 percent.

In Hong Kong, the Hang Seng index is down 0.4 percent to 12,407.46. Big bank HSBC is 0.4 percent ahead, but China Mobile is in the red.

New Zealand's Top 50 is up 0.29 percent to 2616.99. Figures released Monday show New Zealand's headline CPI rose 0.4 percent in the first quarter, taking annual inflation to 1.5 percent, below the consensus forecast.

The moves in Asia come after another mixed day on Wall Street Friday, with the Dow closing half a percent higher and the tech-heavy Nasdaq down 0.32 percent. (Full storyexternal link)



Reuters contributed to this report.

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