Nikkei tumbles on Enron reaction


The weekend mood in Tokyo was joyful at the royal birth, but that did not extend to the stock market on Monday

TOKYO, Japan -- Tokyo stocks dipped sharply by midday Monday, with the expected boost from the birth at the weekend of a royal princess failing to materialize.

Instead, the market focused on weak economic data and the collapse in the U.S. of the big energy trader Enron Corp.

Japanese banks such as Mizuho Holdings and UFJ tumbled after news that Enron had filed for Chapter 11 bankruptcy protection. UFJ lost 8 percent, while Mizuho was down 5 percent.

Technology stocks were also weaker, with Fujitsu, Toshiba and Sony among those to emulate the slide in their U.S. counterparts.

The benchmark Nikkei 225 average fell 207.37 points or 1.94 percent to 10,490.07 by midday, while the broader capital-weighted TOPIX index lost 1.33 percent or 14 points to 1036.57.

Most other big markets in the region were also weaker, with Korea, Hong Kong and New Zealand all off more than 1.5 percent.

Taiwan bounces back after election

Taiwan and Singapore moved against the trend, with Taiwan bouncing 4 percent to 4619 after weekend elections gave investors more confidence.

In Singapore the Straits Times index was up 8 points or half a percent in late morning trade to 1451..

Australia's S&P/ASX200 lost 10.4 points or 0.3 percent to 3327.1, while in New Zealand, the Top 40 dropped 33.91 points or 1.63 percent to 2041.16.

In Seoul, the Kospi was down 8.27 points or 1.28 percent to 635.62 despite news that embattled chipmaker Hynix Semiconductor was talking to rival Micron Technology about a possible strategic alliance.

Hynix was one of the few gainers, adding 135 won or 6.4 percent to 2280 won. SK Telecom was off sharply, losing 11,500 won or 4.36 percent to 252,500 won.

Birth not enough to keep market happy

In Tokyo, traders said the royal birth was a supportive factor for sentiment Monday, but was not enough to outweigh concerns about the dismal outlook for the domestic economy and mixed results on Wall Street Friday.

The government is to release preliminary July-September gross domestic product data on Friday, with the figure expected to confirm Japan has entered its fourth recession in a decade.

. "The birth is surely a bright piece of news, but it is unlikely to boost the economy, which as we all know is in a very weak state," Masaru Kazama, head of equities at Nissan Securities, told Reuters news agency.

Investors moved to take profits on recent gains in baby-related shares, with stroller and car seat maker Combi Corp sliding 21.15 percent to 820 yen and baby wear maker Kimuratan plunging 21.19 percent to 93.

Toshiba, Japan's top producer of chips, lost 2.66 percent to 512 yen after the U.S. Nasdaq gave up 0.14 percent and the Philadelphia Semiconductor index fell 2.67 percent.

Consumer electronics giant Sony was down 130 yen or 2.2 percent to 5680 yen. Mobile phone leader NTT DoCoMo gave up 20,000 yen or 1.24 percent to 1.59 million yen. Second-ranked telco KDDI was also off by 1.24 percent, but No.3 Japan Telecom put on 2 percent to 439,000 yen.

Hong Kong down more than 200 points

Dentsu, the world's fourth-largest ad agency, was bid-only with no sellers at 520,000 yen. A mistaken order at 405,000 yen by UBS Warburg marred Dentsu's Friday debut on the Tokyo Stock Exchange, after it opened at 420,000 yen.

In Hong Kong, the Hang Seng index was down more than 200 points or about 1.8 percent to 11,077 in late morning trade.

Weighing on the index was banking giant HSBC Holdings, which fell 1.85 percent to HK$92.75, tracking falls in its sector peers in London on concerns over their exposure to Enron.

The same applied to Australia, where most of the big banks were lower on Enron's woes. But resources giant BHP Billiton rose half a percent to A$10.10 after it said it would invest in a new coal mine.

Reuters contributed to this report.