Nikkei set to fall on bank woes, may test 26-yr low

TOKYO, March 3 (Reuters) - Japan's Nikkei stock average is
likely to fall on Tuesday, with banks such as Mizuho Financial
Group <8411.T> weak as fears deepen about the extent of damage to
the U.S. financial system, with a test of October's 26-year low
possible.
U.S. stocks slid to 12-year lows on Monday as embattled
insurer AIG posted a record $61.7 billion loss, the
biggest in U.S. corporate history, and received another
government bailout. [nN02404364] [.N]
"The Nikkei will start weak and probably test 7,000, and
while buying by public pension funds is likely to emerge at the
lows, it will most likely be limited," said Yumi Nishimura,
deputy general manager at the investment advisory section of
Daiwa Securities SMBC.
"Stocks are likely to be weak across the board."
Tokyo trade is likely to be light amid an absence of strong
trading factors during Asian trading time, with some market
players saying the only real hope for global stocks lies in some
sort of fresh U.S. policy for the financial system.
The benchmark Nikkei <.N225> is likely to trade between 6,900
and 7,200, and could test the Oct. 27 low of 6994.90 -- the
lowest since 1982. The Nikkei closed at 7,280.15 on Monday and
last week fell as low as 7,155.16.
In a sign the market is set to fall, Nikkei futures traded in
Chicago <2NKc1> closed at 7,070, down from 7,250 at the Osaka
close .

----------------------MARKET SNAPSHOT @ 2249 GMT ------------
INSTRUMENT LAST PCT CHG NET CHG
S&P 500 <.SPX> 700.82 -4.66% -34.270
USD/JPY 97.27 -0.24% -0.230
10-YR US TSY YLD 2.8643 -- -0.156
SPOT GOLD 925 -0.04% -0.350
US CRUDE 40.15 0.00% -4.610
DOW JONES <.DJI> 6763.29 -4.24% -299.64
-------------------------------------------------------------

> Dow ends under 7,000, S&P tests 700 on AIG fallout [.N]
> Dollar gains as financial gloom boosts safe-haven appeal [USD/]
> Bonds rally in safety bids as Wall Street tanks [US/]
> Gold turns lower as equity sell-off deepens [GOL/]
> Oil drops 10 pct as economic gloom outweighs OPEC [O/R]

STOCKS TO WATCH
-- Mitsubishi Motors Corp <7211.T>
Mitsubishi Motors said on Monday it will work with PSA
Peugeot-Citroen on its new electric car, the i MiEV,
aiming to sell the car in Europe from the end of 2010 or early
2011.
-- Sekisui House Ltd <1928.T>
Sekisui House said on Monday that group pretax profit will
likely tumble 50 percent to 38.5 billion yen for the business
year ending in January 2010.
-- Toyota Motor Corp <7203.T>
Toyota said on Monday it aimed to boost its market share in
Europe to 6 percent in 2009 from 5.3 percent last year, although
it expects industrywide sales in the region to tank nearly 30
percent to 15 million vehicles. [nT322728]
(Reporting by Elaine Lies; Editing by Chris Gallagher)
((elaine.lies@thomsonreuters.com; +81 3 6441 1807; Reuters
Messaging:elaine.lies.reuters.com@reuters.net))

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