investors may be looking at gold as nikkei gets pu

News

Nikkei hits lowest in nearly 2 months, banks fall
14:08, Monday, 20 November 2006

(Adds stocks, comment, byline)

By David Dolan

TOKYO, Nov 20 (Reuters) - The Nikkei share average dropped to
its lowest point in almost two months on Monday, ending the
morning down 1.3 percent as investors punished Mizuho Financial
Group Inc. <8411.T> and other major banks ahead of their earnings
results.

Tech stocks declined after a fall by similar U.S. firms,
while shares of INPEX Holdings Inc. <1605.T> and other resource
companies extended losses on lower crude oil prices.

While weaker U.S. techs weighed on similar shares in Japan,
investors refused to shift their funds into domestic-demand firms
such as banks, said Tatsuyuki Kawasaki, director of equities
trading at Kaneyama Securities.

"Investors are also appearing to take a wait-and-see attitude
ahead of earnings from Japan's large banks," Kawasaki said.

Instead of stocks, global investors might be looking to move
into oil and gold, which look relatively undervalued after the
U.S. Dow Jones industrial average <.DJI> hit another record high
on Friday, he said.

"Wall Street's advance looks like it might be about to
stall," Kawasaki said. "I think investors are getting ready to
shift their funds into oil and gold."

The Nikkei <.N225> dropped 214.95 points to 15,876.78 by the
close of the morning session, after earlier hitting its lowest
level since Sept. 27.

The broader TOPIX <.TOPX> was down 1.71 percent at 1,546.60
after sinking to its lowest since Aug. 9.

Declines were broad, with losing shares outnumbering
advancers by a ratio of nearly nine to one on the Tokyo
Exchange's first section.

Trade volume was relatively active, with 865 million shares
changing hands, compared with last week's morning average of 784
million.



MIZUHO, MITSUBISHI UFJ

Shares of Mizuho Financial finished the morning down 3.1
percent at 823,000 yen. Japan's second-largest lender was the
most actively traded share in terms of value.

Mitsubishi UFJ Financial Group Inc. <8306.T>, the world's
largest by assets, fell 2.1 percent to 1.39 million yen. Both
lenders are due to release their earnings results later in the
day.

At current levels, banks' share prices have already factored
in weak earnings results, said Hiroyuki Fukunaga, chief
strategist at Rakuten Securities.

"There is a possibility the bank shares may rebound after the
earnings results as investors are likely to return, thinking that
all the bad news is out for now," Fukunaga said.

Advantest Corp. <6857.T>, a manufacturer of chip-testing
gear, fell 2.3 percent to 5,980 yen.

Fellow chip-gear manufacturer Tokyo Electron Ltd. <8035.T>
lost 2.6 percent to 8,700 yen after the tech-heavy Nasdaq
Composite Index <.IXIC> slipped 0.13 percent to 2,445.86.

Oil and gas developer INPEX Holdings dropped 3.2 percent to
904,000 yen, adding to a 3.5 percent fall in the previous
session.

Crude oil futures were at $58.36 a barrel in early
Asian trade on Monday after falling to a 17-month low of $54.86
last week.

Among gainers, Goodwill Group Inc. <4723.T> rose 3.2 percent
to 80,100 yen after the staffing agency said on Saturday it had
spent about 88.3 billion yen through an investment company to take a 67 percent stake in privately held Crystal Co. Ltd., a
rival that is about three times its size in terms of sales.