TOKYO, Aug 19 The Nikkei stock average could fall some 2 percent for its third day of declines on Friday hit by recession fears in the United States and new worries about the health of European banks.
Nikkei futures in Chicago 2NKc1 ended at 8,760, down 2 percent or 180 points from their Osaka JNIc1 close of 8,940.
Analysts said the Nikkei is expected to trade between 8,700-8,850 on Friday, adding that the index is likely to find support at 8,656, a low posted on August 9 when the market tumbled on U.S. debt woes.
Falls in banking shares as well as exporters are expected to drag down the market.
On Thursday, factory activity in the U.S. Mid-Atlantic region slumped to a nearly 2-1/2 year low in August and home resales unexpectedly dropped last month, dampening hopes for a quick revival in economic growth. [IDnN1E77H0E8]
Other data on Thursday also added concerns about the U.S. economy, with the Philadelphia Federal Reserve Bank's business activity index plummeting to minus 30.7 in August.
"Investors have been spooked by these data. They are now focusing on next week's data such as U.S. GDP," said Yumi Nishimura, a senior market analyst at Daiwa Securities.
"Retail investors may buy defensive stocks on dips, but such buying may not have an impact on the overall index."
Analysts added that investors are focusing on whether Fed Chairman Ben Bernanke will drop any hints about further monetary easing measures when he speaks at a regional event in Jackson Hole, Wyoming, next week.
The benchmark Nikkei fell 1.3 percent to 8,943.76 on Thursday. The broader Topix index shed 1.2 percent to 767.31. ----------------------MARKET SNAPSHOT @ 2245 GMT ------------
INSTRUMENT LAST PCT CHG NET CHG S&P 500 1140.65 -4.46% -53.240 USD/JPY 76.56 0.09% 0.070 10-YR US TSY YLD 2.0676 -- -0.099 SPOT GOLD 1822.89 -0.05% -0.960 US CRUDE CLc1 81.54 -1.02% -0.850 DOW JONES 10990.58 -3.68% -419.63 -------------------------------------------------------------
> Beaten-down Wall St slammed by recession fears > Dollar, yen up with U.S. recession fears at forefront > Bonds rally as economy, eurozone fears spur bid > Gold surges 2 pct to record on economic fears > Brent oil drops nearly $4 as recession fears grow
STOCKS TO WATCH
--Mizuho Securities Co.
Mizuho Securities plans to form a fund targeting privately held Chinese businesses through a tie-up with a local firm, the Nikkei busines daily said.
Shimamura will expand its nationwide clothing store network by opening smaller stores in urban areas focusing on women's fashions, the Nikkei business daily said.
Nippon Yusen's cruise ship business is expected to suffer a 4.4 billion yen pretax loss for the year ending next March, its third straight year in the red, rocked by the March earthquake and a slowdown in the North American economy, the Nikkei said.
--Tokyo Electric Power Co , KDDI
Tepco plans to unload its 8 percent stake in telecommunications giant KDDI, a government panel overseeing the company's restructuring said Thursday. (Reporting by Ayai Tomisawa; Editing by Edwina Gibbs)