Page last updated at 10:30 GMT, Monday, 2 February 2009

Corporate gloom hits Tokyo shares

Kazuo Furukawa, president of Hitachi
Hitachi's products range from rice cookers to nuclear reactors

Japan's top share index fell 1.5% in Monday trading, after several leading companies warned of steep losses.

The Nikkei dropped 120.07 points to 7,873.98, its lowest close in a week. Elsewhere in Asia and in Europe, stock markets also fell.

Shares in Hitachi sank 17% after the company warned of a $7.8bn loss.

Pummelled by the global downturn, a growing number of electronics makers including Sony and Toshiba have shed jobs and are forecasting losses.

Mizuho Financial Group, Japan's second largest bank, slid 6.6% after posting a $1.6bn quarterly loss, its second in a row, while consumer electronics firm Mitsubishi Electric fell 9.1% after it gave a lower profit forecast.

'Severe' conditions

Hitachi's statement surprised analysts and the loss is set to be a record for a Japanese manufacturer.

"Since Hitachi's business portfolio covers a wide range, it was seen resilient to a downturn compared to companies like Toshiba that focus on the chip sector," said Standard & Poor's analyst Hiroki Shibata.

"But now its automobile, semiconductor, industrial equipment, flat TV - almost all of its operations - are facing an earnings slump, and conditions are very, very severe for it," he said.

"It will probably take a long time to recover."

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MARKET DATA - 11:36 UK

FTSE 100
5429.64up
23.70 0.44%
Dax
5733.05up
19.54 0.34%
Cac 40
3784.02up
14.48 0.38%
Dow Jones
10403.79up
78.53 0.76%
Nasdaq
2273.57up
35.31 1.58%
BBC Global 30
5707.15up
20.65 0.36%
Data delayed by at least 15 minutes

SEE ALSO
Hitachi to cut up to 7,000 jobs
30 Jan 09 |  Business
Sony sees first loss in 14 years
22 Jan 09 |  Business
Sony to cut plants and 8,000 jobs
09 Dec 08 |  Business
Higher costs hit Hitachi profits
31 Oct 08 |  Business
Sony and Toshiba profits plummet
29 Oct 08 |  Business

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