Japanese stocks tumbled, led by financial companies including Nomura Holdings Inc., after analysts said Citigroup Inc. may be short of capital, renewing concern losses from U.S. subprime mortgages will reduce earnings.
The Standard & Poor's 500 Index and Dow Jones Industrial Average slumped 2.6 percent yesterday, erasing about $369 billion of market value. Citigroup led declines by financial stocks, plunging the most in five years.
Matsushita Electric Industrial Co. led exporters lower after U.S. consumer spending rose less than forecast and manufacturing activity slowed more than estimated. The U.S. is Japan's biggest export destination.
``Citigroup's plunge, prompted by the analyst rating cuts, is bad news for lenders here even though they don't have the same degree of subprime exposure,'' said Soichiro Monji, who helps oversee $47 billion at Daiwa SB Investments Ltd. in Tokyo. ``Automakers and electronics companies that rely on the U.S. market are tough to buy today considering the drop in manufacturing activity.''
The Nikkei 225 Stock Average slumped 320.17, or 1.9 percent, to 16,550.23 as of 9:08 a.m. in Tokyo. The broader Topix index dropped 32.71, or 2 percent, to 1,603.07.
Nikkei futures expiring in December lost 2.3 percent to 16,520 in Osaka and fell 2.5 percent to 16,500 in Singapore.
In other Asian markets open for trading, Australia's S& P/ASX 200 Index dropped 1.8 percent and South Korea's Kospi index declined 1.9 percent. ( Bloomberg )