*Nikkei down 2.2 percent, hits lowest level in a week
*Banks hit by U.S. credit market worries
*Toyota drops after cutting global sales forecasts
(Adds stocks, details)
By Aiko Hayashi
TOKYO, July 29 (Reuters) - The Nikkei average fell 2.2
percent on Tuesday, with financial shares sliding as worries
about the U.S. credit market mounted while automakers were hurt
after Toyota Motor Corp <7203.T> cut its global sales forecast.
As investors jitters grew again about the potential for more
U.S. bank losses to wreak further damage to the slowing U.S.
economy and the global economic outlook, exporters like Canon Inc
<7751.T> skidded.
"The uncertainty in the global economy is pushing down
exporters, while the downward revision to sales forecasts by
Toyota is weighing heavily on automakers," said Yoshinori Nagano,
chief strategist at Daiwa Asset Management.
He added that while Japanese financial shares were tracking
their U.S. peers, their stronger fundamentals meant they would
not fall as hard.
The benchmark Nikkei <> shed 287.34 points to end the
morning session at 13,066.44, hitting the lowest level in a week
and below its 25-day moving average.
The broader Topix <> declined 2.3 percent to 1,270.37.
Merrill Lynch & Co <MER.N>, the third-largest U.S. investment
bank, said after the closing bell that it would take a $5.7
billion pretax write-down in the third quarter due to losses on
its sale of mortgage assets and plans to raise at least $8.5
billion by selling new common shares.
That added to credit worries triggered by the seizure of two
small U.S. banks by regulators and commments from an analyst that
Lehman Brothers Holdings <LEH.N> may post a loss in the third
quarter and take an additional $2.5 billion write-down.
Concerns about Japanese corporate earnings, with many of
those out so far disappointing investors, were also weighing on
the market.
Japanese companies announcing results later in the day
include Mitsubishi Motors Corp <7211.T>, Sony Corp <6758.T>,
Matsushita Electric Industrial <6752.T>, Nomura Holdings Inc
<8604.T> and Toshiba Corp <6502.T>.
FINANCIALS, EXPORTERS DOWN
Top lender Mitsubishi UFJ Financial Group <8306.T> shed 2.8
percent to 947 yen, No.2 Mizuho Financial Group <8411.T> dropped
3.1 percent to 525,000 yen, and Sumitomo Mitsui Financial Group
<8316.T>, the third-biggest bank, lost 3 percent to 820,000 yen.
Nomura, Japan's biggest brokerage, sank 4 percent to 1,525
yen.
Canon slid 3.2 percent to 4,900 yen and industrial robot
maker Fanuc Ltd <6954.T> fell 4.2 percent to 8,810 yen, becoming
the biggest drags on the Nikkei 225.
Toyota declined 3.5 percent to 4,710 yen and Honda Motor Co
Ltd <7267.T> skidded 3.8 percent to 3,510 yen after the world's
biggest automaker cut its 2008 global sales forecast by 350,000
units to 9.5 million vehicles due to a big downturn in the U.S.
market. []
Nippon Steel Corp <5401.T>, the world's second-biggest
steelmaker, lost 2.8 percent to 594 yen after a fire broke out on
Tuesday at one its plants in southwest Japan. []
Matsushita Electric Works Ltd <6991.T> tumbled 6.8 percent to
955 yen after Mitsubishi UFJ Securities cut its rating on the
stock, citing a tough housing market for the lighting and housing
product maker.
Trade was light on the Tokyo exchange's first section, with
798 million shares changing hands, compared with last week's
morning average of 851 million.
Declining stocks outpaced advancing ones by a ratio of more
than 10 to 1.
(Reporting by Aiko Hayashi; Editing by Edwina Gibbs)
