Tokyo techs, banks drag market down

Koizumi's weekend trip to the U.S. saw him win approval for his reform agenda from President Bush, but the market marked banks down on Monday

TOKYO, Japan -- Tokyo stocks closed sharply lower on Monday after the Bank of Japan's tankan quarterly survey showed declining business confidence.

Technology, banking and retail stocks were among those hardest hit. Carmaker Honda was a rare bright note with a 2.2 percent gain.

The Nikkei 225 stock average ended 217.8 points or 1.7 percent down at 12,751.18, while the broader capital-weighted TOPIX index dropped 14.06 points or 1.1 percent to 1,286.92.

Elsewhere in the region, Australia stocks tumbled back from last Friday's record close, with the benchmark S&P/ASX200 closing 52 points lower at 3438.4, for a drop of 1.5 percent.

New Zealand and Singapore were also lower, while Taiwan's Taiex made a late recovery to close 3.43 points higher at 4886.86.

Korea's Kospi up, HK market closed

In Seoul, the Kospi was virtually unchanged, up 1.61 points or 0.27 percent to 596.74. SK Telecom, Samsung Electronics and Hyundai Motor were among those to gain, while Hynix Semiconductor was down 1.25 percent to 2760 won, a decline of 35 won.

The Hong Kong stock market was closed Monday for a public holiday.

In Japan, tech stocks, banks and retailers all declined after the BOJ's tankan corporate survey produced a headline figure of minus 16 for the large manufacturers' sentiment diffusion index.

This was down from minus five in March, when the index worsened for the first time in nine quarters.

The tankan index subtracts the percentage of firms reporting unfavorable conditions from those with favorable responses. A positive reading means optimists outnumber pessimists.

Toshiba, Matsushita decline

Top semiconductor equipment maker Tokyo Electron tumbled 4.64 percent to 7,200 yen amid fears its bottom line would suffer from a cutback in capital spending at Japan's major chip makers.

Toshiba Corp, Japan's number one semiconductor producer, fell 3.95 percent to 633 yen, erasing its 3.62 percent climb in the previous session.

Fujitsu lost 3.51 percent to 1,264 yen, now hovering at levels last seen in November of 1998.

Matsushita Communication Industrial fell 5.11 percent to 5,390 yen. The president of Japan's largest cellphone maker said on Monday he saw a strong possibility that the company would revise down its forecast for the 2001-02 business year due to weaker than expected handset sales.

In the banking sector, Mizuho Holdings, the world's largest bank by assets, lost 2.59 percent to 565,000 yen. Sumitomo Mitsui Banking Corp dropped 3.3 percent to 996 yen.

Traders also expressed disappointment that the weekend meeting between Prime Minister Junichiro Koizumi and U.S. President George W. Bush was short on details about how to speed up the disposal of bad loans crippling Japan's financial system.

Reuters contributed to this report.