Nikkei Declines 2%, Nippon Electric Falls

Nigel Thomas
26 Sep, 2011
New York City

Stocks in Japan extended losses after a 3-day weekend. The yen edged higher and trading companies led the decliners. Commodities traded lower. Nippon Electric Glass fell after it lowered its fiscal first half outlook.

[R]6:00 PM Tokyo – Stocks in Japan extended losses after a 3-day weekend. The yen edged higher and trading companies led the decliners. Commodities traded lower. Nippon Electric Glass fell after it lowered its fiscal first half outlook.[/R]

Japanese stocks extended losses after a 3-day weekend and the sentiment worsened after the euro zone turmoil showed a no sign of abatement.

Greek bailout talks took another twist after the Deputy Finance Minister of Germany Joerg Asmussen said Sunday in Washington that Greece may have to wait after October 3 meeting to access the next tranche of 8 billion euros.

The whirlwind of talks in Washington over the weekend failed bring a new consensus among the policymakers as the U.S. corral the European leaders to find a quick solution to Greek problem.

The market sentiment is forecasting the Greek debt default and banks may be paid less than 40 cents on the dollar compared to the current swap of 80 cents. The Greek populous sentiment is sliding in the favor of a total default or even Greece exiting the euro zone, once unthinkable only a year ago.

The Nikkei 225 Stock Average fell 2.2% to 8,374.13 and the broader Topix index declined 2.1% to 728.85.

The yen edged lower to 76.16 from 76.36 against one dollar and the euro rose from the 10-year low to 104.35 after trading at 104.15 on Friday.

Trading volume on the First Section on the Tokyo Stock Exchange increased to 2.1 billion shares, lower than 1.6 billion shares average last week. In trading, 1,381 shares fell and 228 increased.

Stock Movers

Softbank extended the loss by 5% after dropping 12.3% on Friday to 2,167 yen after a report said that the company will no longer be the exclusive seller of Apple Inc’s iPhone in Japan. KDDI is expected to start selling the phones from November.

KDDI Corp declined 8% to 574,000 yen after surging 20% in the last two weeks on the speculation that the company may begin selling iPhone soon. The company did not make any announcement at an industry gathering.

Dai-ichi Life dropped 1.4% to 76,000 yen after the insurer said it held in June 330 billion yen or $4.2 billion of Italian and Spanish bonds last week. The Greek default worries dragged stocks by 5% in the last two sessions.

Nippon Yusen KK dropped 8 yen to 205 yen and Mitsui OSK Lines Ltd declined 5.8% to 1,172 yen.

Mitsubishi UFJ Financial Group fell 3 yen to 329 yen and Sumitomo Mitsui Financial Group decreased 12 yen to 2,077 yen. Mizuho Financial Group Inc decreased 1 yen to 111 yen.

The Tokyo Electric Power Company, Inc declined 13% to 259 yen after the head of the head of the commission set up by the government to help disaster victims said that the company will have carry other reforms and cut jobs before increasing utility rates. The utility is seeking to increase 10% rates but may fall short of meeting its new capital requirements.

Nippon Electric Glass dropped 12.3% to 656 yen after the company cut its profit target for the six months ending in September to 24 billion yen from as high as 29.5 billion yen.

Resource stocks declined after copper, zinc and energy prices declined. Mitsubishi Corp declined 8% to 1,565 yen and Mitsui & Co fell 5.9% to 1,172 yen.

Toyota Motor decreased 1.7% to 2,583 yen and Honda Motor Co. dropped 30 yen to 2,245 yen and Nissan Motor decreased 23 yen to 620 yen.

Sony Corp fell 1.4% to 1,484 yen, Panasonic Corp fell 30 yen to 705 yen and Canon Inc increased 5 yen to 3,360 yen. Sharp Corp declined 30 yen to 581 yen.

Olympus fell 46 yen to 2,272 yen. Fanuc fell 3.6% to 10,440 yen. Kyocera fell 2.6% to 6,370 yen.

Komatsu fell 61 yen to 1,637 yen and Hitachi Construction Machinery Co declined 52 yen to 1,192 yen.