Nikkei in Japan in 4-day Decline; Utilities Plunge

Nigel Thomas
05 Oct, 2011
New York City

Stocks in Japan extend losses for the 4-day on the global markets worries. Banks and insurers closed lower after Italian debt rating was cut. Electric utilities plunged after Trade Minister Edano said he is looking to revised rate framework. The yen traded at a record high against the euro.

[R]6:00 PM Tokyo – Stocks in Japan declined on the global markets worries. Banks and insurers closed lower after Italian debt rating was cut. Electric utilities plunged after Trade Minister Edano said he is looking to revised rate framework. The yen traded at a record high against the euro.[/R]

Stocks in Japan closed lower after Italian debt rating was cut and electric utilities led the decliners.

The market sentiment turned weak at the opening after Italian debt rating was lowered by the Moody’s and fears of uncontrolled debt contagion in the euro zone. Policymakers in region are in prolonged discussions to shore up the confidence in the banking sector but investors are growing pessimistic with the delay in Greek funding and inability of the central bank in containing the debt contagion.

Moody''s Investors Service downgraded Italy''s government bond ratings by three notches to A2 from Aa2, with a negative outlook, citing material increase in long-term funding risks for euro area sovereigns with high levels of public debt.

The negative outlook also reflects increased downside risks to economic growth due to macroeconomic structural weaknesses and a weakening global outlook, the ratings agency said.

The Nikkei 225 Stock Average decreased 0.9% or 73.1 to 8,382.98 and the broader Topix index fell 9.93 or 1.3% to 726.25.

The yen edged lower to 76.69 from 76.85 against one dollar and traded near one-decade high against the euro to 102.06 from 102.14.

In trading, volume declined to 2.067 billion shares on the First Section of the Tokyo Stock Exchange and decliners outnumbered the gainers by 1,416 to 189.

Stock Movers

Fast Retailing declined 4% to 13,340 after the apparel retailer reported weaker than expected sales in September. Domestic same store sales at Uniqlo dropped 10.7%, second monthly sales decline in a row.

Japan Petroleum Exploration Co decreased 33 yen to 2,676 yen and Inpex increased 0.3% to 457,000.

Utilities declined sharply after Trade Minister Yukio Edano was quoted in the Asahi newspaper that he may be looking to revise electric power prices.

The Tokyo Electric Power Company decreased 27 yen to 203 yen, Tohoku Electric Power dropped 3.3% or 33 yen to 1,016 yen and the Kansai Electric Power fell 4.2% to 1,239 yen.

Mitsui OSK Lines, Ltd declined 3.7% to 258 yen a day ago the shipping company reported a loss of 17 billion yen in the fiscal first half ending in September on the rising yen and weak shipping freight rates.

Kawasaki Kisen Kaisha declined 4.7% to 141 yen and Nippon Yusen K.K. declined 5 yen to 189 yen.

Mitsubishi UFJ Financial Group fell 6 yen to 325 yen and Sumitomo Mitsui Financial Group decreased 48 yen to 2,066 yen.

Mitsubishi Corp decreased 32 yen to 1,397 yen and Mitsui & Co fell 17 yen to 1,026 yen.

Komatsu decreased 82 yen to 1,458 yen and Hitachi Construction Machinery Co increased 1 yen to 1,280 yen.

Dai-ichi Life fell 1.4% to 75,800 yen and a rating agency lowered the credit rating of Italian bonds held by the life insurer.

Toyota Motor decreased 2% to 2,517 yen and Honda Motor Co. fell 7 yen to 2,195 yen and Nissan Motor decreased 21 yen to 658 yen.

Sony Corp fell 1.7% to 1,404 yen, Panasonic Corp declined 6 yen to 709 yen and Canon Inc closed down 30 yen to 3,430 yen. Sharp Corp decreased 1 yen to 641 yen.

Olympus Corp added 3 yen to 2,275 yen. Fanuc Ltd declined 90 yen to 10,130 yen. Kyocera increased 30 yen to 6,350 yen.

Japan Tobacco Inc decreased 0.3% to 363,000 yen.