TOKYO, Nov. 18 (Xinhua) -- Japan's 225-issue Nikkei Stock Average fell 0.55 percent on Wednesday to its lowest close in six weeks as real estate developers and banks weighed heavily on markets in an ongoing pattern of Japanese corporate equity financing. The key benchmark Nikkei lost 51.13 points from Tuesday to close at 9,674.49, its lowest close since Oct. 5.
The broader Topix index of all First Section issues on the Tokyo Stock Exchange was down 6.94 points, the equivalent of 0.81 percent to 846.55, it's lowest close since May 1.
The continued strengthening of the yen against the dollar negatively impacted exporter shares and Japan Airline Corp's stock plummeted to a record low in trading Wednesday, further contributing to pervasive negative investor sentiment.
Ongoing uncertainty about the sustainability of government stimulus measures coupled with abstruse economic policies to offset deflation and concerns about a resurgent domestic economic downturn are doing little to appease market sentiment.
"All we're seeing are negative cues -- the risk of JAL going bankrupt, an anticipated announcement later today by Mitsubishi UFJ Financial on its equity financing plan, and there are probably more to follow," said Fumiyuki Nakanishi, chief equity strategist at SMBC Friend Securities Co.
Ailing carrier Japan Airlines Corp. saw its stock touch its lowest level since the firm's 2002 integration with Japan Air Systems. JAL shed 3.92 percent to 98 yen on Wednesday after the nation's transport minister Seiji Maehara declined to rule out court-led liquidation proceedings. Reports that a private equity company may inject U.S. 1.1 billion dollars into the struggling carrier failed to spark investor interest, brokers said.
Diversified banking and other financial issues were particular drags on the market Wednesday, as were real estate firms, amid speculation about monumental fundraising initiatives through share-issuance.
Mitsubishi UFJ Financial Group, Japan's biggest bank, is set to announce results later on Wednesday and according to sources close to the matter the bank is likely to announce its plans for capital-raising.
"Fears that planned corporate fundraising will dilute the value of outstanding shares and that such massive financing moves will continue through early 2010 have been weighing on the market recently," said Hiroichi Nishi, equity manager at Cordial Securities Inc.
Japan's top lender Mitsubishi UFG Financial Group lost 0.6 percent to 484 yen, whilst Sumitomo Mitsui Financial Group dropped5.9 percent to 2,850 yen. Mizuho Financial Group also ended the day in negative territory falling 2.4 percent to 166 yen at the 3 p.m. close.
Within Japan's real estate sector Heiwa Real Estate Co. Ltd. slumped 5.8 percent to 275 yen and its counterpart Mitsubishi Estate Co. Ltd also closed down, dropping 4.59 percent to 1,307 yen. Tokyo Land Corp. was one of the biggest decliners on the Nikkei Wednesday, retreating 10.70 percent to 292 yen. Taiheyo Cement Corp. also ended trade marking significant losses of 10.61 percent to close at 101 yen.
As significant declines were spread across real estate, consumer finance and metal works Wednesday, with Japan Steel Works Ltd. closing down 0.98 percent at 1,101 yen, gains were made in pharmaceutical, chemical and automotive issues.
Chugai Pharmaceutical Co. Ltd. rose 0.36 percent to 1,664 yen, whilst Takeda Pharmaceutical Co. Ltd. also ended in positive territory gaining 0.84 percent to close at 3,580.
Mitsubishi Motors Corp. surged 4.80 percent to 131 yen and Suzuki Motors Corp also closed up at 2,165 yen, an increase of 1.16 percent on Tuesday's close.
In an active day of trade on Wednesday, some 2.3 billion shares changing hands on the Tokyo exchange's First section, an increase on last week's daily average of 1.7 billion.
Declining shares outnumbered advancing ones by 2 to 1.
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