TOKYO -- Japanese stocks closed sharply lower following two weak Wall Street sessions, with concerns over earnings outlooks and the yen's recent strength dragging down Sony and other big technology names.
The Nikkei Stock Average fell 422.89 points, or 4.8%, to 8413.91, following Friday's 39.62-point decline. The Japanese market was closed Monday for the Coming of Age Day holiday. The index has fallen 8.9% in the past three sessions, the steepest three-day decline since the period ended Nov. 13.
The market steadied itself in early Wednesday trading, rising 0.8% at midday on a rebound by Sony and other exporters.
Still, recent share-buying in the U.S. and Japan on hopes for President-elect Barack Obama's policies has run its course, and investors are selling on concerns over fundamentals, said Yukio Takahashi, market analyst at Shinko Securities. With earnings reports from such big U.S. companies as Intel /zigman2/quotes/203649727/composite INTC -0.82% Corp. and J.P. Morgan Chase /zigman2/quotes/205971034/composite JPM -2.80% & Co. set for this week, the Nikkei could test lower ground, with 8000 seen as the next support level, he said.
Stocks with earnings-related cues posted big losses, beginning with Sony, which sank 8.9% Tuesday following a Nikkei report that the consumer-technology and media conglomerate is likely to slide to an operating loss of about 100 billion yen ($1.12 billion) in the fiscal year ending in March.
Similarly, Toshiba /zigman2/quotes/205628942/delayed JP:6502 +0.18% shed 8.6% after national broadcaster NHK reported that the company is set to post its first operating loss in seven years because of slumping semiconductor operations.
Shares of big Japanese banks posted losses, after U.S. financial stocks fell sharply. Mizuho Financial Group /zigman2/quotes/204507985/delayed JP:8411 +1.00% shed 8.4% while Sumitomo Mitsui Financial Group /zigman2/quotes/203656770/delayed JP:8316 +1.03% fell 7% and Mitsubishi UFJ Financial Group fell 6.2%.
Other Asian shares ended mostly lower in volatile trading.
In HONG KONG, the Hang Seng Index fell 2.2% to 13668.05, as stocks failed to capitalize on early gains and posted a sixth loss in a row, on persistent worries about the global economy.
In MUMBAI, India's Sensitive Index fell 0.4% to 9071.36. Selling in ICICI Bank /zigman2/quotes/208917098/composite IBN -1.47% and Reliance Industries dragged the market lower for the fourth consecutive session.
In LONDON, the U.K.'s FTSE 100 index shed 0.6% to 4399.15. Standing out among the banks, Barclays retreated 10%. U.K. pub chains had a difficult day. Punch Taverns shares shed 12%, while rival J.D. Wetherspoon /zigman2/quotes/209658419/delayed UK:JDW +0.09% fell 2.5%.
In MADRID, shares of Banco Santander fell 3.4% following news that prosecutors are investigating how customers of the bank lost more than €2.3 billion ($3.1 billion) by investing with Bernard Madoff.
Write to Juro Osawa at firstname.lastname@example.org