Topix Declines First Time in Four Days After S&P Cuts Banks’ Ratings

By Norie Kuboyama - Nov 30, 2011 10:49 AM GMT+0700

Japanese stocks fell, with the Topix Index headed for its first drop in four days, after Standard & Poor’s cut credit ratings for U.S. lenders including Bank of America Corp. and a European official said the region’s bailout fund may fall short of its goal.

Sumitomo Mitsui Financial Group Inc. (8316), Japan’s No. 2 bank by market value, fell 1.9 percent. Sony Corp., the country’s biggest exporter of consumer electronics, lost 3 percent. Nippon Yusen K.K., Japan’s top shipping line by sales, sank 5.1 percent after Moody’s Investors Service put the company under review for a possible rating cut. Asahi Glass Co. slipped 3.8 percent after industry leader Corning Inc. lowered its earnings forecast.

The Topix lost 0.9 percent to 722.92 as of the 12:42 p.m. in Tokyo, with almost three stocks (TPX) falling for each that gained. The Nikkei 225 Stock Average (NKY) dropped 1.2 percent to 8,379.80. The gauge has declined 6.8 percent this month, erasing October’s gains, as signs emerged that Europe’s debt crisis is spreading to major economies.

“The rating cuts for the banks may have a negative impact on investor sentiment,” said Koji Toda, chief fund manager at Resona Bank Ltd. in Tokyo. “What investors are really paying attention to is whether policy makers are going to take steps to resolve the European debt situation.”

To contact the reporter on this story: Norie Kuboyama in Tokyo at nkuboyama@bloomberg.net.

To contact the editor responsible for this story: Nick Gentle at ngentle2@bloomberg.net