By Masaki Kondo
Aug. 20 (Bloomberg) -- Japan's stocks extended their decline to a second day as concerns mounted that the nation's biggest export market may falter and global banks will post more losses.
Sony Corp., which gets a quarter of its sales from the U.S., slipped 2.1 percent after the fewest U.S. home starts in 17 years sapped confidence in a recovery in the world's largest economy. Mitsubishi UFJ Financial Group Inc. sank 1.8 percent. Kawasaki Kisen Kaisha Ltd. led shipping lines to their biggest drop in almost two weeks after transport fees for commodities fell. Inpex Holdings Inc., Japan's biggest oil explorer, rose the most this week after crude rose for the first time in four days.
``There is increasing uncertainty in the market, and investors will likely take a wait-and-see attitude,'' Hiroichi Nishi, an equities manager at Nikko Cordial Securities Inc., said in an interview with Bloomberg Television in Tokyo.
The Nikkei 225 Stock Average declined 90.75, or 0.7 percent, to 12,774.30 as of 9:56 a.m. in Tokyo. The broader Topix index fell 9.79, or 0.8 percent, to 1,225.75. More than two stocks retreated for each that gained on the Topix.
U.S. housing starts fell 11 percent last month to the lowest in 17 years because of weakening demand and tighter financing, the Commerce Department yesterday said. The U.S. housing slump has triggered more than $500 billion in writedowns and credit losses for financial companies globally.
Sony dropped 2.1 percent to 4,160 yen, while Matsushita Electric Industrial Co., the world's biggest maker of consumer electronics, slumped 2 percent to 2,265 yen. Canon Inc., the largest digital-camera maker, lost 2 percent to 5,040 yen.
Mitsubishi UFJ, Japan's largest publicly traded bank, slid 1.8 percent to 814 yen, while smaller rival Sumitomo Mitsui Financial Group Inc. declined 1.5 percent to 672,000 yen. Nomura Holdings Inc., the nation's biggest brokerage, sank 1.5 percent to 1,461 yen.
Electronics makers and banks accounted for almost a half of the Topix's slump.
More Writedowns
JPMorgan Chase & Co. analysts said Lehman Brothers Holdings Inc. may write down about $4 billion in assets when reporting third-quarter earnings. Goldman Sachs Group Inc. said it's ``increasingly likely'' American International Group Inc. will have to raise more capital as the company may need to pay $20 billion on credit-default swaps AIG sold.
``The worst is yet to come in the U.S.,'' Kenneth Rogoff, former chief economist at the International Monetary Fund, said in an interview yesterday.
Kawasaki Kisen dived 3.1 percent to 762 yen, while Nippon Yusen K.K., Japan's largest shipping line, retreated 2.7 percent to 852 yen. Mitsui O.S.K. Lines Ltd., the second biggest, fell 3.9 percent to 1,243 yen. Shipping companies as a group were headed for the sharpest drop since Aug. 8 and were the biggest losers among 33 industry groups on the Topix.
Commodities Rally
The Baltic Dry Index, a measure of shipping costs for commodities, broke a four-day winning streak on speculation recent gains discouraged bookings for capesize vessels that haul coal and iron ore.
Inpex added 2.2 percent to 1.13 million yen. Crude oil for September delivery rose 1.5 percent to $114.53 a barrel in New York yesterday, the first gain in four days, while gold futures for December delivery climbed 1.4 percent, as a weakening dollar spurred investors to snap commodities as an inflation hedge. Sumitomo Metal Mining Co., Japan's largest gold producer, surged 3.7 percent to 1,417 yen.
Toyota Motor Corp., the world's biggest automaker by value, fell 2 percent to 4,820 yen. The company is expected to cut its global sales target for 2009 to as low as 9.7 million units from 10.4 million, the Tokyo Shimbun newspaper reported today, without saying where it got the information.
Nikkei futures expiring in September retreated 0.5 percent to 12,780 in Osaka and slumped 0.7 percent to 12,780 in Singapore.
To contact the reporter for this story: Masaki Kondo in Tokyo at mkondo3@bloomberg.net.
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