* Nikkei, Topix down 2.7 pct after fall on Wall Street
* Toyota, other auto shares drop after Toyota profit warning
* Toshiba gains on report of new battery factory
(Adds stocks, details)
By Aiko Hayashi
TOKYO, Dec 24 (Reuters) - The Nikkei stock average fell 2.7
percent on Wednesday as investors sold Toyota Motor Corp <7203.T>
and auto-related stocks after the world's biggest automaker
forecast its first-ever annual operating loss.
Bridgestone Corp <5108.T> skidded more than 5 percent after
Japan's largest tyre maker cut its operating profit forecast for
the year to Dec. 31 to 118 billion yen ($1.3 billion) from 155
billion yen, citing slumping sales in North America and Europe in
the face of global recession.
Japanese markets were closed on Tuesday for a national
holiday.
"Investors lack trading factors to keep buying stocks.
Coupled with a fall on Wall Street, Japan's economic fundamentals
are bad and so are corporate earnings, including those of Toyota
and Honda," said Fumiyuki Nakanishi, manager at SMBC Friend
Securities.
"But losses appear to be limited as I think the market
expects to see a New Year rally in the U.S. on hope for the new
administration after investors return from the Christmas
holidays."
The benchmark Nikkei <> shed 234.83 points to 8,488.95,
after rising 1.6 percent on Monday to book its highest finish
since Nov 11.
The broader Topix <> declined 2.7 percent to 825.77.
In the United States, further deterioration in the housing
market and worry over weak consumer spending in the final stretch
of the Christmas shopping season hurt Wall Street, sending the
Dow Jones <> 1.2 percent lower. []
Takashi Ito, a senior strategist at Nomura Securities, said
he expects to see further cuts to corporate earnings forecasts
for the next business year.
TOYOTA SLIDES
Toyota shares slid 4 percent to 2,780 yen. The automaker
blamed a relentless sales slide and a crippling rise in the yen
in what it said was an emergency unprecedented in its 70-year
history. []
Many market analysts said the revision had been largely
factored in.
Rival Honda Motor Co <7267.T> lost 5.7 percent to 1,797 yen
and Nissan Motor Co <7201.T> shed 2.3 percent to 297 yen.
Bridgestone declined 5.2 percent to 1,219 yen.
Denso Corp <6902.T> and other auto parts makers sank after
Toyota's profit warning, fueling investors' worries over the
outlook for the auto industry as manufacturers around the world
struggle with a sharp drop in sales.
Denso dropped 2.8 percent to 1,342 yen. Earlier on Wednesday,
the company slashed its group net profit forecast by 90 percent
to 10 billion yen for the current year to March.
Kanto Auto Works <7223.T> tumbled 11.5 percent to 1,038 yen
and Stanley Electric <6923.T> shed 3.5 percent to 917 yen.
On the bright side, Toshiba Corp <6502.T> gained 3.8 percent
to 329 yen after the Nikkei business daily said the firm plans to
spend up to 30 billion yen to build a lithium ion battery factory
in Niigata Prefecture, northwest of Tokyo, boosting its
production capacity for state-of-the-art batteries about 70-fold.
[]
Trade was light on the Tokyo exchange's first section, with
748 million shares changing hands, compared with last week's
morning average of 898 million.
Declining stocks outpaced advancing ones by more than 6 to 1.
(Reporting by Aiko Hayashi; editing by Sophie Hardach)
