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Tokyo tumbles 138 points
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August 24, 1999: 5:39 a.m. ET
Nikkei hit by bank sell-off; other markets cautious ahead of Fed rate decision
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LONDON (CNNfn) - Tokyo was dragged into the red as investors cashed in on the recent strong rally in banking stocks. Other markets in the region were mixed in cautious trading ahead of the U.S. interest rate decision due later Tuesday.
The Nikkei 225 fell 138 points to 18,095.41, a drop of 0.8 percent, as most of the financial stocks that had led a 11.6 percent rally in the banking sector Monday came under pressure.
The biggest loser was Daiwa Bank which plummeted 18.3 percent to 325 yen, while Sakura Bank fell almost 12 percent to 595 yen and Sumitomo Bank shed 10 percent to end at 1,701.
The three banks involved in the alliance which would create the world's biggest bank, were mixed.
Dai-Ichi Kangyo Bank closed up 3.4 percent at 1,250 yen, while Industrial Bank of Japan finished just over 1 percent higher at 1,300. Fuji Bank lost ground, however, as it fell more than 1.9 percent to 1,220 yen.
The major securities houses also closed in the red, with Nomura Securities the biggest decliner, down almost 3 percent at 1,750 yen.
Technology play Fujitsu was helped by the strong overnight rally on the Nasdaq in New York, as the shares closed more than 5.3 percent higher at 3,360 yen.
Caution suffused the region, however, ahead of the expected quarter of one percentage point hike in U.S. interest rates later Tuesday. Asian investors failed to pick up on Monday's bull run on Wall Street, which sent the Dow Jones industrial average to a record high close.
One of the few markets in the region to show any sign of strength was South Korea's Kospi as sentiment was lifted by the government's apparent willingness to take a strong hand in the restructuring of Daewoo.
A sharp fall in long-term interest rates also helped the market. The blue-chip index jumped 1.6 percent to close at 932.41, a jump of 14.83 points.
"The government is showing strong determination to handle the Daewoo crisis," said Sohn Jae-hwa, an analyst at Hanjin Investment & Securities. "Daewoo's concerns appear to be evaporating this week."
The only other market to register sizable gains was Manila's Composite, which closed 1.3 percent higher at 2,248.93.
In Hong Kong, the Hang Seng opened for the afternoon session after being shut for the second successive morning as powerful tropical storms continued to batter the region. The leading index managed to post mild gains in a fairly directionless session to close 60 points higher at 13,633.87.
Sydney's All Ordinaries closed in negative territory to end at 3,052.4, a fall of 12 points. Taiwan ended even further in the red, with the Weighted index down 1.7 percent at 7,984.39.
The Straits Times index in Singapore ended just inside negative territory, down less than 4 points at 2,120.02
Kuala Lumpur's blue-chip index managed to hold onto small gains, closing 0.4 percent higher at 775.18, while the JSX index in Indonesia gained just 0.25 percent to close at 586.24.
Thailand's blue chips were 0.5 percent lower at 445.88.
-- from staff and wire reports
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