Most Japan Stocks Fall on U.S. Slowdown Concern; Promise Gains

By Makiko Kitamura and Satoshi Kawano

July 14 (Bloomberg) -- Most Japanese stocks fell on concern surging energy prices will dent earnings for the nation's auto and electronics makers. Consumer lenders surged after Shinsei Bank Ltd. agreed to buy General Electric Co.'s local finance business.

Toyota Motor Corp., Japan's largest carmaker, dropped 0.2 percent, and Honda Motor Co. declined 0.6 percent. Canon Inc., the world's biggest maker of digital cameras, fell 0.8 percent. Promise Co., Japan's second-largest consumer lender by market value, climbed 3.3 percent.

The Nikkei 225 Stock Average declined 17.40, or 0.1 percent, to 13,022.29 as of 9:02 a.m. in Tokyo. The broader Topix index fell 0.2, or less than 0.1 percent, to 1,285.71.

U.S. Treasury Secretary Henry Paulson sought authority from Congress to buy stakes in and lend to Fannie Mae and Freddie Mac, aiming to stem the collapse of confidence in the largest sources of U.S. mortgage financing. Meanwhile, IndyMac Bancorp Inc. became the second-biggest federally insured financial company to be seized by U.S. regulators after a run by depositors left the California mortgage lender short on cash.

Goldman Sachs Group Inc. lowered its rating on Japan's megabank sector to ``neutral'' from ``attractive,'' cutting its rating on Mitsubishi UFJ Financial Group Inc. to ``neutral'' from ``buy.''

``The sector has deteriorated more than we expected,'' Goldman analyst Toyoki Sameshima wrote in a report dated July 12. ``We see few price drivers that could shake off the macroeconomic deterioration.''

Shinsei will buy GE's Tokyo-based Lake unit and its mortgage-loan and credit-card businesses, the bank said in a statement on July 11. The deal will add 779 billion yen to Shinsei's balance of outstanding loans to individuals in Japan, which stood at 1.2 trillion yen as of March 31, the company said.

Crude oil for August delivery fell for the first time in four days to $142.49 a barrel.

To contact the reporters for this story: Makiko Kitamura in Tokyo at mkitamura1@bloomberg.net.