Disappointing data drag down Tokyo stocks

Disappointing industrial production data stoked concern that Japan's economy remained stalled, sending Tokyo lower, while a strongher dollar underpinned other Asian stock markets.

The Nikkei 225 average fell 0.7 per cent to 10,899.25 while the Topix index dropped 0.4 per cent to 1,098.79.

Specialist manufacturers declined on news that industrial output dropped in October having already fallen in the three months to September. Recent economic data have indicated that Japan's economy remains mired in a soft patch after six months of zero growth.

Fanuc, a leading industrial robot maker, fell 0.8 per cent to Y6,430, Hirose Electric lost 1.1 per cent to Y10,910 and TDK, a maker of disk drive parts, was off 0.8 per cent at Y7,390. Murata Manufacturing, an electronic component maker, recovered from early falls to close up 0.9 per cent at Y5,410.

Toshiba ended up 0.5 per cent at Y437 after four Hollywood studios backed its standard for next generation DVDs, dealing a blow to rival developer Sony. Shares in Sony, which is striving to avoid a repeat of its defeat in the video cassette recorder wars years ago, fell 0.3 per cent to Y3,750.

NTT DoCoMo, the country's dominant mobile operator, climbed 2.3 per cent to Y179,000 after saying it had signed a deal with UK group MMO2 to launch its i-mode interent service in parts of Europe.

Troubled retailer Daiei fell 1.4 per cent to Y206, giving up some gains made on Monday on news that Aeon, Japan's number one retailer in sales terms, and Kyocera, an electronics maker, wanted to sponsor the group's restructuring.

Several other groups, including Wal-Mart of the US, have expressed an interest in Daiei, currently in the hands of a government-backed rehabilitation organization.

It also emerged that debt-laden Daiei had agreed to sell its professional baseball franchise to Softbank, the telecoms and investment group, for Y5bn. Softbank shares fell 1.6 per cent to Y5,080.

E*Trade, Japan's most popular online securities group, surged 25 per cent to Y500,000 on its Osaka stock exchange debut, as investors flocked to gain exposure to the expanding web broking sector.

The group became Japan's third listed web broker after Matsui Securities, which finished up 0.9 per cent at Y3,220, and Monex Beans, which dropped 1 per cent to Y102,000.

Aioi Insurance fell 1.3 per cent to Y455 after the group posted first-half net profit down 66 per cent after the market close on Monday.