Japanese Stocks Tumble as Sumitomo Mitsui, NEC Earnings Plunge

By Patrick Rial

Aug. 1 (Bloomberg) -- Japanese stocks fell, capping a weekly decline, led by Sumitomo Mitsui Financial Group Inc. and NEC Corp. after both said profit fell by half as growth slowed at home and abroad.

Sumitomo Mitsui, the nation's second-largest bank by market value, plunged the most in six months as bad-loan provisions reduced first-quarter net income. NEC, the country's largest personal-computer maker, posted its steepest decline in two decades as a drop in network equipment orders eroded profit. Pacific Holdings Co., Japan's third-largest real-estate asset manager, dropped by its daily limit amid speculation funding for projects will dry up as bank earnings decline.

``It looks pretty bad doesn't it?'' said Masafumi Oshiden, a Tokyo-based fund manager at BlackRock Inc., which oversees more than $1.4 trillion. ``Any bad news is getting punished, while any small piece of good news is being ignored, which is typical of a bear market.''

The Nikkei 225 Stock Average lost 282.22, or 2.1 percent, to 13,094.59 at the close of trading in Tokyo. The broader Topix index declined 30.69, or 2.4 percent, to 1,272.93. The Nikkei recorded a 1.8 percent drop for the week, while the Topix fell 2 percent. Both gauges slumped to the lowest level since July 18.

Among Topix-listed companies announcing quarterly earnings in the month through yesterday, 436 posted declining net income with 296 reporting gains, according to Bloomberg Data.

Nikkei futures expiring in September fell 2.3 percent to 13,050 in Osaka and dropped 2.5 percent to 13,050 in Singapore.

To contact the reporter for this story: Patrick Rial in Tokyo at prial@bloomberg.net.