Tokyo's Nikkei fell 0.38 percent by late trade on Monday, extending losses into a seventh session as worries about high oil prices and data showing weaker business sentiment prompted stop-loss selling by small investors. Brokers and banks were among the hardest hit by selling from such investors, who need to return money borrowed six months ago for margin trading, analysts said. The two sectors had led the Nikkei to a year-to-date closing high of 12,163 in late April. The Nikkei average <.N225> was down 41.49 points at 10,853.67 as of 0521 GMT, poised to hit another five-week closing low. It skidded 400 points or 3.5 percent in the previous six trading days to end Friday at its lowest close since Aug. 20.
The broader TOPIX index <.TOPX> was down 0.78 percent at 1,094.27. "Individuals who bought on margins in April when the Nikkei hit a year-to-date high are busy selling to stop further margin calls," said Terushi Hirotama, head of trading at Ichiyoshi Securities. "They have no choice but to sell, and this is worsening sentiment." All of Japan's "big four" banks fell and Nomura Holdings <8604.T>, the country's biggest brokerage, hit its lowest level since June 2003, after a government survey showed before the open that big Japanese firms are more cautious about business conditions in the coming months. The business survey index (BSI), based on a survey by the Finance Ministry and the Economic and Social Research Institute, produced a forecast of 9.5 for the October-December quarter compared with 12.9 in the previous survey released in June. For the three months to September it was plus 9.6, compared with a forecast of 12.2. But it improved from plus 7.2 in the April-June survey. The BSI subtracts the percentage of firms saying domestic economic conditions are unfavourable from those reporting they are favourable. Analysts said buyers were also becoming increasingly cautious about placing orders ahead of the release of industrial production figures on Thursday and the Bank of Japan's "tankan" corporate sentiment survey on Friday. Nomura earlier fell as low as 1,421 yen before trading down 0.62 percent at 1,435 yen. Mitsubishi Tokyo Financial Group Inc. <8306.T>, the healthiest among Japan's top four banks, lost 2.49 percent to 900,000 yen, extending falls into an eighth session. Profit-taking dampened recent gainers such as Kawasaki Kisen Kaisha Ltd. <9107.T>, which hit a 14-year closing high on Friday.
Kawasaki Kisen, Japan's third-ranked shipping firm, dropped 3.32 percent to 729 yen and rival Mitsui O.S.K. Lines Ltd. <9104.T> slid 3.6 percent to 642 yen. On the political front, Prime Minister Junichiro Koizumi will reshuffle his cabinet on Monday. But the changes are not expected to send any immediate ripple through financial markets. Meanwhile, the final pricing of the world's second-biggest initial public offering (IPO) this year, that of Electric Power Development Co. (J-Power), is being closely watched. Analysts said some investors were selling stocks to raise cash to buy J-Power, Japan's biggest power wholesaler that is to list on the Tokyo Stock Exchange on Oct 6. Tokyo Electric Power Co. Ltd. <9501.T>, Japan's biggest utility firm, fell 2.43 percent to 2,405 yen.///