Nikkei in Japan Falls; Sumitomo Mitsui, Mitsubishi UFJ in Focus

Nigel Thomas
15 Nov, 2011
New York City

The Nikkei index declined for the first time after rising for three days in a row. The continued turmoil in the euro zone, rising inflation in China and ongoing supply disruptions overwhelmed investor sentiment. Sumitomo Mitsui said it will buy back 1.6% of its stock.

[R]6:00 PM Tokyo – The Nikkei index declined for the first time after rising for three days in a row. The continued turmoil in the euro zone, rising inflation in China and ongoing supply disruptions overwhelmed investor sentiment. Sumitomo Mitsui said it will buy back 1.6% of its stock. Mitsubishi UFJ said first half net soared on one-time gains.[/R]

Stocks in Japan closed lower after rising in three previous trading sessions. Export led economies in Asia are worried that the ongoing turmoil in the euro zone will continue for many more months and may dampen the economies.

Italy installed new prime minister, however skeptical bond market lifted the yields on Italian and Spanish bonds and the cost of insuring French bonds also rose.

In addition German Chancellor Angela Merkel controlled CDU party voted to offer struggling euro zone nation to leave the currency bloc but stay in the European Union.

The Nikkei 225 Stock Average fell 0.7% to 8,541.93 and the broader Topix index fell 0.7% to 730.91.

In trading on the first section of the Tokyo Stock Exchange, volume decreased to 1.23 billion shares, lower than 1.41 billion shares in yesterday’s trading.

Stock Movers

Nisshin Steel Co declined 7% to 108 yen and Nippon Metal Industry Co eased 6.4% to 73 yen after both companies denied merger talks on Monday and stocks were halted in late afternoon.

After the close today, two companies announced that they plan to set up a holding company and merge by October next year.

Toyota Motor decreased 12 yen to 2,471 yen and Honda Motor Co. decreased 12 yen to 2,273 yen and Nissan Motor Co Ltd fell 8 yen to 711 yen.

Sony Corp decreased 20 yen to 1,353 yen, Panasonic Corp closed down 9 yen at 692 yen and Canon Inc fell 25 yen to 3,385 yen.

Nintendo Co. Ltd fell 370 yen to 12,080 yen.

Olympus Corp increased 100 yen or 18.5% to 640 yen after the camera maker increased by its daily limit for the second day in a row. The stock is still down 75% since the accounting scandal emerged five weeks ago.

Nomura Holdings, Inc decreased 1.5% to 253 yen on the ongoing worries related to Olympus scandal.

Fanuc Ltd increased 10 yen to 12,820 yen and Kyocera closed down 70 yen at 6,600 yen. Nikon Corp fell 29 yen to 1,733 yen.

Mitsui OSK Lines, Ltd closed unchanged at 260 yen, Kawasaki Kisen Kaisha, Ltd closed unchanged at 137 yen and Nippon Yusen K.K. was flat at 175 yen.

Dai-ichi Life rose 3,200 yen to 79,700 yen.

Property and Casualty insurers remain in focus as Thailand struggles with the rising flood losses and Japan accelerates efforts to rebuild the tsunami affected region.

MS & AD Insurance Group Holdings, Inc closed flat at 1,523 yen and NKSJ Holdings Inc surged 28 yen to 1,532 yen.

Mitsubishi UFJ Financial Group closed flat at 334 yen and Sumitomo Mitsui Financial Group increased 28 yen to 2,094 yen.

In heavy trading in bank shares Sumitomo Mitsui was second most traded stock in the TSE and said it will buy back 1.6% of its outstanding shares and net in the first half declined 25% from a year ago.

Mitsubishi UFJ net soared 95% in the first half after it converted preferred shares in Morgan Stanley.

Komatsu Ltd increased 8 yen to 1,986 yen and Hitachi Construction Machinery Co decreased 18 yen to 1,480 yen.

Elpida Memory Inc plunged 9.1% to 330 yen as the DRAM memory maker struggles with the demand for personal computer memories and flooding in Thailand has disrupted its hard disk supply chain.