Nikkei set to drop on Wall St tumble, firm yen

TOKYO, Nov 2 (Reuters) - The Nikkei average is likely to
slide on Monday, hurt by a stronger yen and after Wall Street
tumbled on weak consumer spending data and renewed worries about
Citigroup's (C.N) balance sheet.

Analysts also cited CIT Group's CIT.N bankruptcy filing on
Sunday as further negative news for the market. CIT is a U.S.
lender to hundreds of thousands of small and medium-sized
businesses. [ID:nN01408863]

Sony Corp (6758.T) and Panasonic Corp (6752.T) are likely to
draw attention after signalling the worst may be over for the
world's two largest consumer electronics makers as they raised
their full year outlooks, helped by cost cuts. [ID:nT247231]

"The market will likely lose ground across the board after a
sell-off in U.S. stocks, though both U.S. and Japanese stocks
have already been oversold in the short-term," said Hiroichi
Nishi, general manager of equity marketing at Nikko Cordial
Securities.

"The strengthening of the yen is also going to weigh on the
market...there are no new Japan-specific reasons to buy Japanese
stocks."

Nikkei futures traded in Chicago 2NKc1 finished at 9,740.00
on Friday, down 2.7 percent from the Osaka close JNIc1,
pointing to a sharply lower start.

The benchmark Nikkei .N225 is likely to move between 9,600
and 9,900 on Monday, market players said. It rose 1.5 percent on
Friday to 10,034.74.

The yen JPY= rose to two-week highs against the dollar
around 89.20 yen in early Asia trade. Investors fret about a
stronger yen as it eats into exporters' profits when they are
repatriated.

The S&P .SPX lost 2.8 percent on Friday as the fragility of
the U.S. economic recovery was highlighted by economic reports
that showed U.S. consumers cut spending in September and consumer
sentiment turned gloomier this month. [ID:nN30482062]

Citigroup shares sank after accounting expert Robert Willens,
an independent consultant, said the bank was likely to have a $10
billion fourth-quarter charge on its deferred tax assets.

Japan's corporate earnings season continues this week.
Companies reporting later in the day include Suzuki Motors Corp
(7269.T) and Daihatsu Motor Co (7262.T).
----------------------MARKET SNAPSHOT @ 2309 GMT ------------

INSTRUMENT LAST PCT CHG NET CHG
S&P 500 .SPX 1036.19 -2.81% -29.920
USD/JPY JPY= 89.8 0.14% 0.130
10-YR US TSY YLD US10YT=RR 3.3884 -- 0.000
SPOT GOLD XAU= 1042.05 -0.23% -2.350
US CRUDE CLc1 76.78 -0.29% -0.220
DOW JONES .DJI 9712.73 -2.51% -249.85
-------------------------------------------------------------
> Wall St tumbles on recovery jitters, financials [.N]
> Dollar, yen rally on shift to safe haven [USD/]
> Bonds climb as economic worry sparks safety bid [US/]
> Gold drops amid sharp equities sell-off [GOL/]
> Oil falls more than 3 percent on economic woes [O/R]
STOCKS TO WATCH

-- Mitsui Chemicals Inc (4183.T)

Mitsui Chemicals and China Petroleum & Chemical Corp
(600028.SS), or Sinopec, plan to invest a combined 60 billion yen
($669 million) to build two factories in Shanghai, the Nikkei
business daily said on Monday.

They plan to manufacture high-performance materials for
resins and synthetic rubber used in automobiles and consumer
electronics, the Nikkei said.

-- Sanyo Electric Co (6764.T)

Sanyo has agreed with PSA Peugeot Citroen (PEUP.PA) to supply
nickel-metal hydride batteries for the French carmaker's
diesel-electric hybrid cars, the Nikkei business daily said
[ID:nT81803]

Separately, the Nikkei newspaper said Panasonic Corp (6752.T)
will launch its tender offer for shares of smaller rival Sanyo as
early as Thursday, after the deal won approval from Chinese
regulators. [ID:nT113829]

-- Toshiba Corp (6502.T)

Toshiba, Japan's biggest chipmaker, said its semiconductor
operations sprang back to a quarterly profit on cost cuts and
more stable prices, and it said it aimed to lift its annual
outlook. [ID:nT358566]

-- Resona Holdings (8308.T)

Resona said on Friday it would raise 75 billion yen through a
private placement of newly issued preferred shares.

The bank said the shares would be allocated to insurance
companies and the cash raise would boost its capital adequacy
ratio and secure funds to pay back public money.

-- Daiwa Securities Group (8601.T)

Daiwa Securities, Japan's second-largest brokerage, reported
a second straight quarterly profit, helped by a rebound in the
stock market and demand for investment trusts from retail
investors. [ID:nT11934] [ID:nT3677]

-- All Nippon Airways Co (9202.T)

ANA said it expects an annual loss and announced 1,000 job
cuts as Japan's No.2 airline struggles with a drop in passenger
numbers amid the economic downturn.

ANA projected a net loss of 28 billion yen for the year to
March instead of a previously projected profit of 3 billion yen.
The latest forecast was bigger than a consensus of a 19.9 billion
yen loss from 9 analysts polled by Thomson Reuters I/B/E/S.

-- Takefuji Corp (8564.T) and other consumer lenders

Japan will consider reversing its tightening of regulations
on moneylenders to help self-employed business owners following
the financial crisis, the Nikkei business daily said on Sunday.

The leaders will discuss the appropriateness of limiting
unsecured loans to one-third of annual income, as well as whether
the government should take steps to mitigate any adverse impact
of tightened regulations, the paper said. [ID:nT83915]

-- Japan Tobacco Inc (2914.T)

Japan's health minister said on Sunday the country's tobacco
tax could be raised to levels seen in Europe, reiterating the
ministry's proposal forwarded to the government as part of fiscal
2010 tax reforms, Kyodo news agency reported. [ID:nT78208]

-- Nabtesco Corp (6268.T)

Precision machinery maker Nabtesco Corp (6268.T) plans to
form two joint ventures in China in 2010 to tap the country's
growing investment in public transport, Nabtesco director Ben
Sakamoto told Reuters in an interview on Friday. [ID:nT95288]
(Reporting by Aiko Hayashi; Editing by Edwina Gibbs)