March 23, 2012 / 7:01 AM / in 7 years

Nikkei suffers worst day in 2 mths on global growth concerns

* Nikkei falls 1.1 pct, trading volume near 2-mth low
    * Exporters hit as yen gains on weak global growth fears
    * Selloff offers buying chance - market participants
    * Nomura tumbles for third day in a row

    By Mari Saito	
    TOKYO, March 23 (Reuters) - Japan's Nikkei average had its
biggest one-day percentage fall in two months on Friday after
data pointed to slowing factory activity in China and the euro
zone's two largest economies and sparked fresh concerns over
global economic growth.	
    Fears of slower growth lifted the yen, further weighing on
Japanese exporters. Toyota Motor Corp lost 2 percent,
Honda Motor Co Ltd slid 2.9 percent and Sony Corp
 fell 3.1 percent.	
    The benchmark Nikkei lost 1.1 percent to 10,011.47.
For the week, it suffered a 1.2 percent loss, snapping a
six-week winning streak. 	
    The broader Topix declined 1.1 percent on Friday to
852.53. 	
    The yen was last traded at 82.870 against the dollar
after hitting a one-week high of 82.329 on Thursday, well off an
11-month low of 84.187 on March 15.	
    Some market participants said the selloff offered buying
opportunities for longer-term investors who remained upbeat on
the outlook for Japanese equities.	
    "The market was overheated and it (China and Europe data)
provided a good catalyst for investors to take profits," said
Shun Maruyama, chief Japan equities strategist at BNP Paribas
Securities in Tokyo.	
    Maruyama said fears of a Chinese hard landing may be
premature and said the correction was likely to be temporary. 	
    "I do not think this is a turning point for the market,
which continues to be on a recovery trend. In fact, if worries
about global growth continue to drag markets in the short-term,
it might be a good time to buy on the dip," he said.	
    Despite Friday's sell-off, the Nikkei is still up 18.4
percent this year, boosted by a run of strong U.S. economic data
and accommodative monetary policies by global central banks.	
    Through March 17, according to the latest Ministry of
Finance data, foreign investors were net buyers of Japanese
equities for 12 straight weeks. In the week ended March 17, the
net inflow was 287.5 billion yen ($3.49 billion), the highest
since April last year.	
    "If there are names you like, you should pick them up from
here, especially names that are heavily down today," said a
trader at a foreign bank, give life insurers as well as food and
beverage counters as his picks.	
    The insurance sector shed 1.9 percent and the
foods sub-index slipped 0.4 percent on Friday.	
    Deutsche Bank said there were still pockets of good value in
Japanese shares, especially among exporters, following the
bounce.	
    "Even after the rally, there are some interesting value
opportunities in Japanese equities and for patient investors we
find more distressed value in Japanese equities than in the
credit-stricken European equities," Deutsche said in a report.
"The new story is that we may now be facing a structural change
regarding the multi-year strengthening of the yen."	
    According to Thomson Reuters Datastream, the Topix carries a
12-month forward price-to-book ratio of 0.98, much cheaper than
the S&P 500's 2 and the STOXX Europe 600's 1.39.	
    Underscoring investors' upbeat outlook, the Nikkei
volatility index, Japan's fear gauge, rose 2 percent to
20.41 on Friday, far below this year's peak of 24.61 on March 1.
The lower the volatility index, the higher the risk appetite.	
    Trading volume was at its lowest level since the end of
January, with 1.76 billion shares changing hands on the main
board, down from 2 billion shares on Thursday. 	
    Declining shares outpaced advancing issues 1,097 to 438. 	
                    	
    NOMURA EXTENDS LOSSES	
    Financials fell across the board on Friday as investors took
profit on this year's rally, with Sumitomo Mitsui Financial
Group, Mitsubishi UFJ Financial Group and
Mizuho Financial Group down between 1.4 and 2.1
percent. 	
    Nomura Holdings lost 3.8 percent, extending this
week's losses to 6.9 percent as its internal controls are coming
under scrutiny after sources said an employee at Japan's top
investment bank was involved in an insider trading case.	
    Nomura shares are still up more than 61 percent this year.	
    "Of course the allegations of Nomura's involvement in the
insider trading case is negative to their reputation and to the
wider industry," said Yoshihiko Tabei, chief analyst at Kazaka
Securities. "But the stock is up so much this year and this
incident is just one catalyst for investors to take profits."	
    Japan's securities regulator has recommended a fine against
Sumitomo Mitsui Trust Holdings Inc unit, Chuo Mitsui
Asset Trust and Banking, alleging that one of its fund managers
sold Inpex Corp shares after a tip-off about its $6
billion share issue plans.
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