TOKYO (AFX-ASIA) - The Ministry of Finance said the latest diffusion index of business sentiment for large companies deteriorated from the previous survey in August, particularly due to a worsening at large manufacturers. The index for large manufacturers and non-manufacturers stood at minus 28.5 in the fourth quarter, compared with minus 18.3 the previous quarter. The large manufacturer's index stood at minus 39.3, the worst level since 1983. Overall, companies expect sales to drop 3.3 pct this fiscal year, while manufacturers see a fall of 7.2 pct due to sluggish demand for electronics-related machinery and other general machinery. Non-manufacturers see a 1.7 pct decline in sales for the year due to weakness in the retail and wholesaling industries, as well as construction. Pretax profit is forecast to fall 39.6 pct in the full fiscal year at all companies, particularly in electric machinery, retailing and construction. The latest numbers show the first contraction in both pretax profit and sales since the fourth quarter of 1998, a ministry official said. Although the forecast diffusion indices for the first and second quarter of next appear show an improvement, this is a normal seasonal movement, he said.