TOKYO-- Japanese equities closed lower Tuesday on news of a 44% rise in bankruptcies, and after the financial collapse of a national chain of supermarkets.
Investors were also in a hurry to sell stock to boost earnings as the fiscal year-end approaches, leading the banking, steel, retail and insurance sectors lower. But tech shares continued to shine, helped by news that
may win the bidding to take over a defunct bank.
index fell 188.63 to 19,367.83, while the
index, comprising shares listed on the
Tokyo Stock Exchange's
first section, slipped 27.27, or 1.6%, to 1690.14. The
small-cap index jumped 4.01, or 3.4%, to 121.06, while Nikkei
shares rose 48.62, or 2.0%, to 108.73.
Stocks in the retail sector suffered on news that
, a super-market chain operator, had filed for reorganization Sunday.
Seven Eleven Japan
tumbled 700, or 5.4%, to 12,390.
Yet while corporate bankruptcies may nudge up the unemployment rate, they also mean that Japan Inc. is restructuring, said Kathy Matsui, strategist at
"A weak economy is simply proof that corporate restructuring is in progress, and at this early stage of Japan's restructuring cycle, we believe that a weaker deflationary demand environment is better for the stock market long-term than a strong inflationary one," Matsui said in a report on Monday.
"A difficult operating environment puts the necessary pressure on companies to pursue genuine restructuring," she added. The strategist is bullish on Japanese equities, and sees the Nikkei 225 index reaching 21,000 this year.
Bank shares were lower as investors unwound cross-shareholdings to raise money ahead of the end of the current fiscal year, but they were also depressed due to the likely adoption of a new tax system in April. The city of Tokyo will slap a 3% tax on gross operating income of banks with deposits and funds of at least 5 trillion yen, which means most city banks will get hit.
, slipped 73, or 8.3%, to 812,
Dai-Ichi Kangyo Bank
sank 59, or 7.0%, to 786, while
fell 73, or 7.1%, to 951.
Tokyo wasn't bombarded only with sales, however, as tech shares continue to shine.
, up 41, or 4.4%, to 965, has garnered retail interest after the firm announced plans to beef up its Internet operations.
Softbank, which has gained almost 72.8% from the start of the year, stood at 169.000 before the TSE suspended trading due to an overflow of bids. A consortium headed by the Internet giant will likely win the bid to take over the now-defunct
Nippon Credit Bank
, local reports said. The TSE suspends trades in shares that move above or below 2000 yen until the bids and offers roughly match.
rose 7 million, or 5.5%, to 135 million before trading was suspended. Citing trading liquidity problems, the firm told
today that it was considering delisting from the over-the-counter market and possibly jumping to
, a new bourse that is being partially financed by Softbank. The new market is eyeing a June kickoff date.
In lethargic currency dealings, the greenback stood around 108.73 yen.
index pulled back 500.80, or 2.9%, to 16,688.16. Investors took profits on index heavyweights such as
, down 3.250, or 4.9%, to 62.750 and
, down 8.000, or 6.1%, to 123.500.
Pacific Century Cyberworks
, which raised $1.02 billion through a share placement yesterday, rose 2.250, or 9.1%, to 26.900 after being suspended from trading on Friday. The money will likely be used to bid for
Cable & Wireless HKT
, which is currently in merger talks with
. The market remains unsure whether PCC can afford a 34.9% stake in C&W HKT, which fell 1.700, or 6.4%, to 24.700. The stock had been up by almost 50% in the previous two days.
The strength in the won, trading around 1126.60 to the greenback, is beating up Korean shares across the board. The key
index slid 31.17, or 3.4%, to 879.70.