TOKYO -- Japanese shares edged lower Thursday as technology stocks continued to take a beating when margin investors sold key large-cap shares to stem losses.
That said, the tech sector is not the only one under the weather. Many blue-chips were also lower as the unwinding of cross shareholdings hurt the market, traders said.
index fell 320, or 1.9%, to 16,182.01, while the
index, which includes all shares listed on the
Tokyo Stock Exchange's
first section, shed 26.70, or 1.8%, to 1477.83. The
small-cap index lost 2.80, or 3.6%, to 75.73, while the Nikkei
index slid 34, or 2.1%, to 1617.49.
Many investors who had bought large-cap tech shares on margin six months ago -- or when the sector was still humming -- are selling stocks in earnest. In addition, many large institutional investors are selling their blue-chip holdings that they have accumulated over the years as the old school, cozy inter-corporate relations in Japan fall apart. They are fearing the market still can go lower, thus the quicker they get rid of shares, the better.
"It also doesn't help that hedge funds are all shorting the Nikkei 225 futures," added one trader from an U.S. brokerage firm.
lost 350 yen, or 3.3%, to 10,360 ($95.12), while
fell 340, or 3.2%, to 10,260. The latter fell on news that the government will delay the sale of the nationalized
Nippon Credit Bank
to the Internet incubator by one month after political disagreement over the provisions within the already-signed deal. One controversial provision states that the government will buy back any loans that lose more than 20% of their value over three years.
After the failure of department store operator
, some legislators say the government should not shoulder any of these loans, fearing the amount will pile up since bankruptcies are expected to increase. Banks should restructure the bad debt as financial institutions usually do, these officials say.
With the Nikkei 225 index down more than 10% over the past three months, investors also shed shares of securities firms, speculating their profits from brokering fees will be slashed.
lost 158, or 7.4%, to 1972, while
shed 118, or 9.3%, to 1158.
The greenback edged slightly lower against the yen to 108.91.
With excitement over Hong Kong's bank shares disappearing in just one day, the key
index shed 170.14, or 1%, to 17,450.09. Investors had bought bank shares Wednesday as they expected healthy first-half profits. However, even after the
Bank of East Asia
posted profits, shares fell HK$0.90, or 4.6%, to 18.55 ($2.38). Traders were irked that the firm's expenses had increased dramatically.
, which will release numbers Monday, also fell 1, or 1%, to 104.00.
Elsewhere in Asia, a downfall in Korean chip makers hurt the
index, down 16.16, or 2.2%, to 727.68. Taiwan's
index also shed 5.26 to 7956.28.