Nikkei in Japan Declined for the Third Day; Utilities, Banks Fall

Nigel Thomas
16 May, 2011
New York City

Tokyo stock index declined for the third day in a row and dropped to a one-month low. Utilities declined for the second day after Japan passed a rule requiring all utilities to contribute to disaster compensation fund. Banks declined on worries that loans to Tepco may have to be forgiven.

[R]5:00 PM Tokyo – Stocks in Tokyo declined for the third day in a row and the benchmark index dropped to a one-month low. Utilities declined for the second day after Japan passed a rule requiring all utilities to contribute to disaster victims’ compensation fund. Banks declined after officials were not clear if banks will be required to forgive loans to Tepco.[/R]

Stocks in Japan declined for the third day in a row to a one-month low as commodities decline and worries of global economic growth overshadowed the recent earnings.

The Nikkei 225 Stock Average declined 0.9% to 9.558.30 and broader Topix index declined 1.2% to 829.55.

The yen hovered near its recent highs between 81.60 and 82.1113 to a dollar.

Banks and utilities led the decliners for the second day after Japanese officials sent mixed signals regarding Tepco debt. Japan passed on Friday a plan that will require all utilities to make an annual payment for the cost related to compensate nuclear disaster victims.

However, officials today contradicted Friday’s announcement that banks will have to forego some of the debt to Tepco before government releases fund the compensation to victims of nuclear disaster.

Stock Movers

Tokyo Electric Power Co dropped 7.3% to 420 yen. Chubu Electric declined 4.5% to 1,417 yen and Tohoku Electric dropped 5.4% to 1,060 yen.

Mitsubishi UFJ Financial Group declined 1.6% to 377 yen and Sumitomo Mitsui Financial declined 2.1% to 2.401 yen.

Machinery makers gained after better than expected orders data. Coal machinery orders increased 2.9% in March from previous month following a revised 1.9% declined in February.

Mitsubishi Heavy Industries increased 0.3% to 378 yen. Separately, Mitsubishi Electric Corp increased 4.5% to 904 yen after the company reported full-year net of 124.5 billion yen.

Credit Saison dropped 6% to 1,235 yen after the company said full-year net income fell 31% to 12.8 billion yen.

Promise Co dropped 11% to 639 yen after the high interest consumer loans provider reported a net loss of 96 billion yen for the year ended in March compared to a net income of 14.6 billion in the year ago.

Sanrio Co. soared 7% to 2,884 yen after the company estimated net income to increased 14% to 10.7 billion yen in the current year. The company also plans to increase its annual dividend of 30 yen compared to 20 yen in the previous year.

NOK Corp declined 3.6% to 1,390 yen after the automotive and industrial products maker reported fill-year net income of 16.7 billion yen and did not issue current year outlook.