Nikkei drops below 10,000 as region weakens


JAL president Isao Kaneko (L) shakes hands with JAS president Hiromi Funabiki after the two airlines agreed on a merger next year. Their shares fell Tuesday.

TOKYO, Japan -- Tokyo stocks were lower by midday Tuesday, with the Nikkei below 10,000 as airline stocks declined in the wake of the crash of an American Airlines plane in New York.

Banks and techs were also weaker, with banking giant Mizuho Holdings touching a record low.

The benchmark Nikkei 225 average was down 1.17 percent or 118.36 points at 9963.20 after hitting a morning high of 10,057. The broader, capital-weighted TOPIX index lost 1.32 percent or 13.5 points to 1007.61.

Japan Airlines (JAL) fell 2.7 percent to 289 yen, while merger partner Japan Air System (JAS) lost 2.67 percent to 3,650 yen and their domestic rival All Nippon Airways slipped 2.25 percent to 304 yen.

JAL and JAS said after the market closed on Monday they had agreed to integrate operations under a holding company in September 2002. the as gains by Japan Airlines and Asahi Bank offset economic weakness and corporate earnings worries.

Other regional carriers, including Qantas, Singapore Airlines, Korea Air Lines and Asiana, were also weaker.

Korea, HK, Australia also lower

Markets in Australia, Hong Kong and Korea were all lower at the close of the morning session Tuesday. Taiwan and Singapore were flat.

But New Zealand's Top 40 put on 1.8 percent, adding 35.93 points to 2004.44. It rose on good gains by the market's biggest stock, Telecom NZ.

In Australia, the benchmark S&P/ASX200 was down 11.9 points or 0.36 percent to 3293.5. Oil stock Woodside was down, but miner WMC was higher on speculation that a bid from Alcoa will come later this week.

A survey of business conditions by the National Australia Bank showed a partial recovery in business confidence in October, from September's lows.

In Seoul, the Kospi was down 4.28 points or 0.7 percent to 580.42. Korea Telecom, Hynix Semiconductor and Hyundai Motor all made gains, but market heavyweights Samsung Electronics and SK Telecom eased.

In Hong Kong, the Hang Seng index was down 70 points to about 10,520 shortly before noon. Property stocks were weak, while banking giant HSBC was down 1.1 percent to HK$88.25.

Mixed signals from Wall Street

Tokyo's decline followed mixed signals from Wall Street, where the Dow Jones industrial average fell half a percent to 9554.37, while the Nasdaq composite moved higher, up 11.65 points or 0.64 points to 1840.13. At one point the Dow was down to 9408.58.

In Japan, the market was broadly lower, with techs, banks and carmakers all weakening.

One of the few stocks to go against the trend was mobile phone leader NTT DoCoMo which was 2 percent higher at 1.52 million yen. No. 2 telco KDDI was down 1.3 percent at 296,000 yen, while third-ranked Japan Telecom Ltd eased 1.25 percent to 396,000 yen.

Among the big banks, UFJ was down 3.94 percent to 414,000 yen, Mizuho Holdings was down 3.25 percent to 298,000 yen (another record low), while Asahi Bank, the most-heavily traded share on the TSE's first section on Monday, was down 3 percent to 97 yen.

Asahi had jumped to 100 yen at one point Monday after it said over the weekend it would trim bad loans by roughly 200 billion yen ($1.66 billion) in two years through a tie-up with U.S. investment bank Goldman Sachs.

Reuters contributed to this report.