Tokyo, other Asian markets stay weak

TOKYO, Japan -- Tokyo stocks stayed weak by midday Thursday, with the Nikkei still below 11,000.

Japanese banks were the focus of investor nerves, along with high-tech stocks.

A weak performance on Wall Street Tuesday, along with soft GDP figures in the U.S. and a continuing slump in Japanese industrial output added to the market's woes.

Other markets in the region also were down, with Australia's S&P/ASX200 dropping 20 points or 0.6 percent to 3323.8, while in Seoul the Kospi dropped about 1 percent or 5.68 points to 559.95.

A big factor was the fall in Hynix Semiconductor to a record low of 795 won after Korean Development Bank declined to help with a bailout. It later recovered slightly to 870 won, a 7 percent fall.

Hong Kong index down, Taiwan up

In Hong Kong, the Hang Seng index was down about 50 points or half a percent to 11,187.04 just before midday.

Taiwan bucked the regional trend to be slightly higher at noon.

In Tokyo, major banks such as Mizuho Holdings Inc extended Wednesday's losses, which came after the Financial Services Minister said the outstanding balance of bad loans at major banks would likely remain near current levels through fiscal 2003.

The benchmark Nikkei average ended the morning down 112.17 points or 1.02 percent at 10,867.59.

On Wednesday, the Nikkei closed below the key 11,000 mark for the first time since October 1984.

Worrying performance from the Dow

In the U.S., the Dow Jones industrial average closed down 1.28 percent at 10,090.90, its lowest close since April 11.

"The Dow's performance is quite worrying. It's like now the Nikkei and Dow are competing with each other to be the first to breach the 10,000 level," said Hiroyuki Nakai, investment research manager at Tokai Tokyo Securities.

Mizuho Holdings Inc, the world's largest bank by assets, fell 8.0 percent to 460,000, while UFJ Holdings Inc lost 6.64 percent to 591,000 yen.

The capital-weighted TOPIX index was down 20.87 points or 1.85 percent to 1,105.99.

Daiwa Institute of Research has estimated that latent losses at 15 major Japanese banks have grown to 1.89 trillion yen ($15.73 billion) from 328 billion yen at the end of March.

The Nikkei has lost 16 percent since it ended the last business year at 12,999.70.

Weaker-than-expected July industrial output also hurt Tokyo shares by underscoring the dire state of the Japanese economy.

Japan's industrial output fell for a fifth straight month in July, slipping 2.8 percent from a month earlier on a seasonally adjusted basis.

Kyocera confirms job cuts

Oki Electric Industry Co Ltd emerged as the latest company to be punished for a profit warning. The telecommunication equipment maker fell 5.21 percent to 364 yen after saying it would announce later in the day a downward revision of its earnings forecast to March 2002.

One of the few bright spots was major electronic parts maker Kyocera Corp, which rose 4.41 percent to 8,280 yen.

The company confirmed to CNN on Thursday that it will cut its group workforce by about 10,000 from a total 51,000.

Reuters contributed to this report.