Nikkei in Japan Drops 1.6%, Thailand Lowers Growth Outlook

Nigel Thomas
18 Oct, 2011
New York City

Stocks in Japan declined after rising to a 6-week high on the cautious outlook for the euro zone ahead of the weekend summit. Chinese slower economic expansion also contributed to market jitters and Thai floods wreak more havoc in the central Thailand as water rushes down to Bangkok.

[R]6:00 PM Tokyo – Stocks in Japan declined after rising to a 6-week high on the cautious outlook for the euro zone ahead of the weekend summit. Chinese slower economic expansion also contributed to market jitters and Thai floods wreak more havoc in the central Thailand as water rushes down to Bangkok.[/R]

The benchmark index in Japan declined from its six-week high after cautious comments from the German officials. Market volatility was also higher after China reported slowing economic growth and industrial production.

The Nikkei 225 Stock Average decreased 1.6% or 137.69 to 8,879.60 and the broader Topix index lost 1.4% to 751.24.

The yen edged higher to 77.69 from 77.21 against one dollar and fell to 105.25 yen against one euro.

In trading on the main section of the Tokyo Stock Exchange, 1.17 billion shares changed hands, lowest turnover since December. Trading in Olympus shares accounted for 16% of volume.

Thailand lifted its assessment of the damage from the recent floods. Finance minister in an interview said that economic growth will decline to 2% from the previous estimate of 4% in the year and the cost of damage is expected to be 4% of Gross Domestic Product.

The floods have damaged or destroyed at least six industrial estates and one more may be damaged as early as tomorrow. At least 315 people have been killed since July and damaged large parts rice farmland in the north and northeast.

Nava Nakron industrial estate located north of Bangkok, the employs 270,000 people with more than 270 factories, is also facing widespread damages reported by the Thai army.

Stock Movers

Toyota Motor decreased 50 yen to 2,579 yen and Honda Motor Co. added 39 yen to 2,368 yen and Nissan Motor Co Ltd decreased 12 yen to 716 yen.

Sony Corp decreased 19 yen to 1,588 yen, Panasonic Corp fell 20 yen to 743 yen and Canon Inc declined 60 yen to 3,410 yen.

Olympus extended losses for the third day in a row and declined more than 40% since it fired its British born chief executive Michael C. Woodford.

The stock lost again today after its fired CEO approached UK regulators and handed over independent report questioning the payments made to advisors for the purchase of UK based medical equipment firm.

Olympus also said it may take legal action against Woodford for leaking confidential information to media.

Olympus Corp dropped 9% or 138 yen to 1,417 yen, the low last seen in March 2009. Fanuc Ltd decreased 60 yen to 11,980 yen. Kyocera fell 30 yen to 7,090 yen.

The Tokyo Electric Power Company decreased 2 yen to 216 yen, Tohoku Electric Power decreased 13 yen to 942 yen and the Kansai Electric Power fell 13 yen to 1,160 yen.

Mitsui OSK Lines, Ltd decreased 2 yen to 311 yen, Kawasaki Kisen Kaisha, Ltd closed down 5 yen at 154 yen and Nippon Yusen K.K. fell 3 yen at 205 yen.

Mitsubishi UFJ Financial Group fell 6 yen to 335 yen and Sumitomo Mitsui Financial Group decreased 36 yen to 2,152 yen.

Mitsubishi Corp decreased 41 yen to 1,574 yen and Mitsui & Co, Ltd decreased 26 yen to 1,126 yen. Marubeni Corp decreased 16 yen to 429 yen.

Komatsu Ltd decreased 43 yen to 1,740 yen and Hitachi Construction Machinery Co decreased 49 yen to 1,379 yen.

Dai-ichi Life fell 0.8% to 83,800 yen after Germany tempered enthusiasm for the European banking recapitalization plan. The insurance company holds more than $4 billion peripheral euro zone bonds.