Japan's Stocks Plunge After U.S. Bank Rescue Plan Rejected

By Masaki Kondo

Sept. 30 (Bloomberg) -- Japan's stocks plunged after a U.S. bank-rescue package was rejected by lawmakers, deepening concern global credit turmoil will worsen.

Sumitomo Mitsui Financial Group Inc., Japan's third-biggest listed bank, wasn't traded as orders to sell exceeded those to buy. Inpex Holdings Inc., the nation's biggest oil and gas explorer, was set to tumble after crude fell the most in seven years. The Standard & Poor's 500 Index lost 8.8 percent in New York yesterday, the most since October 1987.

``Nobody anticipated this in the market,'' said Mitsushige Akino, who oversees about $468 million at Ichiyoshi Investment Management Co. in Tokyo. ``The global financial market is nearing the brink of collapse, and the only real choice investors have right now is to sell stocks and hold cash.''

The Nikkei 225 Stock Average declined 347.73, or 3 percent, to 11,395.88 as of 9:06 a.m. in Tokyo. The broader Topix index fell 31.67, or 2.8 percent, to 1,096.20. About half of the Topix's shares hadn't yet traded.

The U.S. House of Representatives voted 228 to 205 to reject the biggest government intervention into markets since the Great Depression. Treasury Secretary Henry Paulson said he'll work ``as quickly as possible'' to salvage the rescue plan that would give him the authority to buy bad loans from financial companies.

Crude oil for November delivery yesterday fell the most since November 2001 to $96.37 a barrel on dimmer prospects for the global economy. The yen appreciated against the dollar to as much as 103.56 from 106.33 at the close of stock trading in Tokyo, reducing the value of repatriated sales at Japanese companies.

Nikkei futures expiring in December retreated 5.7 percent to 11,110 in Osaka and slumped 5.9 percent to 11,105 in Singapore.

To contact the reporter for this story: Masaki Kondo in Tokyo at mkondo3@bloomberg.net.