Nikkei Slips; Retail Sales Growth Accelerates

Chandrasekhar Atreya
29 Jul, 2010
New York City

Stocks in Japan lost on weak durable goods orders from the U.S. Retail sales growth gained in June led by demand for cars and clothes. Rising transport need boosts shipping companies. Toshiba posts better-than-expected profit.

[R]5:00 PM Tokyo, Japan – Stocks in Japan lost on weak durable goods orders from the U.S. Retail sales growth gained in June led by demand for cars and clothes. Rising transport need boosts shipping companies. Toshiba posts better-than-expected profit.[/R]

Tokyo’s Nikkei 225 Stock Average fell by 0.7% at mid day after hitting a two-week closing high on the previous day after weak U.S. durable goods orders spurred profit-taking.

The Nikkei 225 Stock Average in Tokyo lost 0.59% or 57.25 to close at 9,696.02. The broader Topix Index dropped for the first time in five days by 0.5% to close at 861.27. The index was dragged down mainly by Panasonic Corp which tumbled 7.7%.

In the index only 56 shares gained while 155 lost and 14 remained unchanged.

Retail sales growth in Japan improved in June led by demand for cars, gasoline and clothes, the Trade Ministry said in Tokyo today. The report said that sales increased 3.2% for the sixth straight monthly gain adding to evidence that the economic growth may last even as export growth slows.

Hotter-than-usual weather spurred demand for iced drinks, ice cream and summer clothes after temperatures in eight major cities was 1.4 degrees Celsius higher than the June average, the ministry said.

A rebound in global shipping demand has boosted the profits of shipping lines in Japan allowing them to forecast increased revenue and profit for the next year. Nippon Yusen K.K., Japan’s largest shipping line had its biggest gain in trading today after more than doubling net income forecast for the year.

Panasonic Corp, the world’s largest maker of rechargeable batteries offered to buy and take full control of Sanyo Electric Co and Panasonic Electric Works Co for 818.4 billion yen to help expand its renewable energy business.

The company is diversifying away from televisions and mobile phones where it has lost market share to Samsung Electronics Co and may sell as much as 500 billion yen of new stock to fund the deal.

Toshiba Corp, a Japanese maker of flash memory chips, posted its second successive quarter of profit on rising chip demand. The company reported a net income of 466 million yen in the quarter ended June 30 compared with a loss of 57.8 billion a year earlier, Tokyo-based Toshiba said in a statement today.

Toshiba is gaining from a surge in demand for chips from products such as Apple Inc’s iPhone. Global sales of NAND, memory chips used in storing photos, songs on portable devices will rise by 32% to a record $17.9 billion this year, according to El Sugundo, California-based research firm ISuppli.

Trade Ministry of Japan asked Apple Inc to report by August 4 on measures the company proposes to take to prevent a fire hazard to its iPod Nano portable music player.

Six such incidents of the 2005 model of Nano catching fire while being charged have been reported to the ministry since 2008, spokesman Hiroshi Miyashita of the Ministry of Economy, Trade and Industry said by telephone today.

Gainers & Losers

Sanyo Electric led the gainers in the Nikkei 225 with a gain of 26.27% to 149 yen followed by Panasonic Electric Works 15.4% to 1,124 yen, Nippon Yusen 4.99% to 358 yen and Clarion Co Ltd 4.44% to 188 yen.

Panasonic Corp led the decliners with a fall of 7.71% to 1,077 yen followed by Hino Motors 5.57% to 390 yen and Advantest Corp 5.18% to 1,903 yen.