India, Feb. 5 -- Japanese automaker Nissan may call off its merger talks with rival Honda, the Nikkei newspaper reported.

As a result, Nissan's shares fell more than 4% before the Tokyo Stock Exchange promptly suspended trading after the article was released, news agency Reuters reported.

However, Honda's shares rose more than 8% in what looked like a sign of investor relief that the merger wouldn't go through.

If the merger had happened, the resulting company would have become the world's third-largest automaker. At the moment, Honda is Japan's second-largest car maker, and Nissan is its third-largest.

The merger was originally proposed to face an industry now threatened by China's BYD and other electric vehicle (EV) entrants.

Nissa...