Japanese Stocks Drop for 6th Day as Recession Concerns Mount

By Masaki Kondo and Patrick Rial

Oct. 9 (Bloomberg) -- Japanese stocks fell for a sixth day as concerns that the global economy is headed for recession outweighed the impact of six central banks slashing their benchmark rates.

Hitachi Construction Machinery Co., the world's largest maker of giant excavators, lost 4 percent after Japan's machinery orders fell at the fastest pace in two years. KDDI Corp., the country's second-biggest mobile phone operator, lost 2.2 percent after mobile phone sales tumbled by half in August. Nomura Holdings Inc., the nation's biggest brokerage, rose 1.7 percent after U.S. Treasury Secretary Henry Paulson said he may pump capital into financial institutions.

``What's driving the market nowadays is not fundamental valuations or technical analysis but investor sentiments,'' Juichi Wako, a Tokyo-based strategist at Nomura Holdings Inc., said in an interview with Bloomberg Television. ``Since paralysis of the money market can't be solved by lower rates, the move is unlikely to eliminate investors' fears.''

The Nikkei 225 Stock Average lost 86.71, or 0.9 percent, to 9,116.61 as of 9:05 a.m. in Tokyo. The broader Topix index declined 3.95, or 0.4 percent, to 895.06. Both gauges lost ground for a sixth day, the longest losing streak since July.

Yesterday, the Nikkei plunged 9.4 percent to 9,203.32 for its third-biggest drop on record and the Topix index slumped 8 percent to 899.01, the steepest fall in 21 years.

U.S. stocks dropped for a sixth day yesterday with the Standard & Poor's 500 Index losing 1.1 percent, after swinging between gains and losses more than 20 times throughout the day.

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