Nikkei in Tokyo Down 1.2%, Tepco Plunges 27%, Banks Fall

Nigel Thomas
06 Jun, 2011
New York City

Stocks in Japan plunged on the ongoing worries related to the Tokyo Electric Power and rising bills of power generations for utility companies. The weak U.S. jobs data also dampened the sentiment. Banks closed lower on the worries that capital new international requirements may lift capital needs.

[R]5:00 PM Tokyo – Stocks in Japan plunged on the ongoing worries related to the Tokyo Electric Power and rising bills of power generations for utility companies. The weak U.S. jobs data also dampened the sentiment. Banks closed lower on the worries that capital new international requirements may lift capital needs.[/R]

The Nikkei 225 Stock Average dropped 1.2% to 9,380.35 and the broader Topix index fell 1.1% to 807.99.

Tokyo trading volume rose to 1.9 billion shares from 1.7 billion on Friday previous week average of 1.8 billion shares.

The yen strengthened to 80.21 from 80.65 against one dollar and rose to 116.50 from 116.70 against one euro.

Stock Movers

Banks closed lower on the worries that some banks may be required to hold more capital to meet the revised international standards.

Mitsubishi UFJ fell 3% to 359 yen after the Nikkei newspaper reported that the large bank may be required to increase its capital by additional 3% of risk-weighted assets.

Sumitomo Mitsui Financial Group Inc declined 1.9% to 2,269 yen. Mizuho Financial Group, Inc fell 0.8% to 121 yen.

Utilities declined after lawmakers ratchet up the rhetoric and the special budget package may be delayed amid political bickering. In addition, senior lawmakers in the ruling Democratic Party again sought to limit the tenure of Prime Minister Naoto Kan.

Tokyo Electric power Company, Inc plunged 27% to 207 yen after Kyodo News reported that the company may post as much as 570 billion yen loss in the current year as it shifts to thermal power generation after the devastating loss at Fukushima nuclear power plant.

The stock also plunged on the worries that the company may face delisting on the Tokyo Stock Exchange. However, TSE president Atsushi Saito said currently the utility does not its delisting requirements.

Chubu Electric Power Co. dropped 8.9% to 1,130 yen and Kansai Electric Power Co fell 9% to 1,202 yen.

Shikoku Electric Power dropped 8.1% to 1,517 yen and Kyushu Electric Power declined 7.4% to 1,092 yen.