Japan Stocks Decline on Lehman Financing Report; Inpex Gains

By Patrick Rial
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Aug. 21 (Bloomberg) -- Japanese stocks declined for a third day after a report Lehman Brothers Holdings Inc. failed to complete a share sale and HSBC Holdings Plc cut its ratings on two of Japan's largest banks.

Daiwa Securities Group Inc., the nation's second-largest brokerage, lost 2.4 percent after the Financial Times said Lehman was unable to reach stake sale agreement with South Korean and Chinese investors. Sumitomo Mitsui Financial Group Inc., the No. 3 listed bank by assets, dropped after HSBC said rising credit costs will eat away profit. Inpex Holdings Inc., Japan's largest oil and gas explorer, gained 2.7 percent after Goldman Sachs Group Inc. predicted oil will rally this year.

``There's not much to be happy about with this market,'' said Hideo Arimura, who oversees about $1.9 billion at Mizuho Asset Management Co. in Tokyo. ``It's getting ever harder for financials to raise cash, and that has investors worried.''

The Nikkei 225 Stock Average slipped 99.48, or 0.8 percent, to close at 12,752.21 in Tokyo after opening 0.3 percent higher. The broader Topix index declined 8.84, or 0.7 percent, to 1,224.53. More than two shares fell for every one that gained on the Topix. Trading volume on the Tokyo Stock Exchange was the lowest since April 14.

Nikkei futures expiring in September lost 0.7 percent to 12,770 in Osaka and dropped 1 percent to 12,770 in Singapore.

To contact the reporter for this story: Patrick Rial in Tokyo at