By Patrick Rial
Sept. 26 (Bloomberg) -- Japan's shares declined, led by shipping lines, as cargo rates plunged. Lenders pared gains as the biggest bank failure in history coincided with conflict over the passage of a $700 billion financial rescue package.
Mitsui O.S.K. Lines Ltd., Japan's second-biggest bulk carrier, fell 6.3 percent to the lowest in almost two years. Mizuho Financial Group Inc. and Sumitomo Mitsui Financial Group Inc., two of the nation's three largest listed banks, retreated from 2.6 percent gains as a deal struck by U.S. lawmakers yesterday on the financial bailout appeared to be in jeopardy, and regulators seized Washington Mutual Inc.
The Nikkei 225 Stock Average fell 113.37, or 0.9 percent, to 11,893.16 at the close of trading in Tokyo. It earlier rose as much as 0.6 percent. The broader Topix index slumped for a third day, losing 6.06, or 0.5 percent, to 1,147.89. Almost four shares dropped for each that climbed on the Topix, which recorded a 0.1 percent weekly drop.
``The assumption is that the bailout will take longer than expected, which is negative,'' said Tsuyoshi Shimizu, a senior fund manager at Mizuho Asset Management Co., which oversees $26 billion. ``The longer it takes to pass something, the more victims we're going to see.''
The Topix rebounded from a four-year low last week as a plan to shore up the financial system improved market sentiment. Those gains were eroded this week amid concern the economy will continue to weaken and as financial markets turmoil continued.
To contact the reporter for this story: Patrick Rial in Tokyo at prial@bloomberg.net.
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