Nikkei falls before Italian vote, Olympus plunges

Tue Nov 8, 2011 2:16am EST

* Olympus plummets 29 pct by daily limit after M&A admission
    * Nomura skids nearly 15 pct to lowest level in at least 37
years
    * Toyota sheds 1.7 pct ahead of downbeat earnings, guidance
withdrawal

    By Lisa Twaronite	
    TOKYO, Nov 8 (Reuters) - The Nikkei share average dropped
more than 1 percent on Tuesday, with investors fearful about
Europe's debt situation ahead of an Italian parliamentary vote
on budget reforms, and as scandal-hit Olympus plunged
after saying M&A funds were used to cover securities losses.	
    Italian woes pressured some stocks exposed to the debt-laden
country, with Nomura Holdings Inc dropping almost 15
percent to its lowest since at least 1974. 	
    In Rome, Prime Minister Silvio Berlusconi defied huge
pressure to resign as he struggled to hold a crumbling
centre-right coalition together after being forced to accept
intrusive IMF surveillance of his economic reforms.
 	
    Toyota Motor Corp fell 1.7 percent. After the
market close, it posted a 32.4 percent drop in quarterly
operating profit and withdrew its full-year profit forecasts as
Thai floods pose a fresh threat to production while supply
shortages from the March earthquake kept output low.
 	
    "Because Toyota withdrew its full-year guidance, there is a
perception that not all of the bad news is out of the way, and
investors who have held onto its shares until now are likely
thinking of giving up," said Masayoshi Okamoto, head of dealing
at Jujiya Securities.	
    The Nikkei ended down for the second straight day,
falling 1.3 percent to 8,655.51. The broader Topix index 
lost 1.7 percent to 738.03.	
    Volume was moderate, with 1.85 billion shares changing
hands, up from Monday's 1.45 billion. Nearly eight shares fell
for each one that rose. 	
    	
    POSITIONING FOR LOSSES	
    U.S. stock futures also declined, suggesting investors were
positioning for losses ahead of the Italian vote, with S&P 500
e-mini futures down 6.5 points at 1,251. 	
    Olympus slid 29 percent and by its daily limit to end at a
16-year low of 734 yen after it admitted for the first time on
Tuesday that controversial acquisitions had been used to cover
up losses on securities investments dating back to the 1980s,
succumbing to weeks of pressure that has battered the company's
share price. 	
   Olympus President Shuichi Takayama blamed Tsuyoshi Kikukawa,
who quit as president and chairman on Oct. 26, Vice-President
Hisashi Mori and auditor Hideo Yamada for the transactions,
adding he would consider criminal complaints against them if
necessary. Mori would be dismissed, the company said.  	
    Nomura fell 14.9 percent to 245 yen and was the heaviest
traded issue by turnover on the main board, with nearly 8 times
the issue's average 30-day volume changing hands. Earlier this
month, it estimated its exposure to Europe at $3.55 billion,
mostly in Italian government securities and positions that
mature in the next five months.  	
    Toyota said on Tuesday its operating profit for
July-September was 75.39 billion yen ($966 million), worse than
an average estimate of 101.3 billion yen in a Reuters survey of
12 analysts. Second-quarter net profit was 80.42 billion yen,
down 18.5 percent.	
    For the year to March 31, 2012, Toyota had forecast an
operating profit of 450 billion yen, but it withdrew its
full-year forecasts for profit and vehicle sales due to
uncertainty surrounding the Thai floods.