Nikkei Trims Gains of Monday, Steelmakers Fall

Nigel Thomas
19 Jun, 2012
New York City

Stocks in Japan trimmed half the gains of Monday after investors focused on the widening contagion in the euro zone. Sharp Corp gained on the hopes that Hon Hai may increase its stake in the company. Steelmakers fell on the price decline worries.

[R]6:30 PM Tokyo – Stocks in Japan trimmed half the gains of Monday after investors focused on the widening contagion in the euro zone. Sharp Corp gained on the hopes that Hon Hai may increase its stake in the company. Steelmakers fell on the price decline worries.[/R]

Stocks in Tokyo fell sharply and erased nearly half of Monday’s gain after bond yields of Spain reached a record and yields on Italian bonds advanced as well.

The Greek elections soothed market nerves after a party that favors to stay in the euro zone won most votes and is expected form a coalition in the next three days.

But, investors quickly shifted their focus to rising bond yields of Spain and Italy and the growing prospects of Spain seeking a bailout in the next three months.

The Nikkei 225 Stock Average fell 65.15 or 0.8% to 8,655.87 and the broader Topix index fell 4.12 to 734.69.

The yen strengthened to 78.94 against one dollar.

Leaders of G20 nations are scheduled to complete their meetings on Tuesday in Mexico but no specific steps are likely to be announced.

Also, the U.S. Federal Reserve is expected to begin its two day meeting later today and the Fed is expected to extend its program of buying long term bonds beyond its June expiry date.

Stock Movers

Kansai Electric Power Company, Inc dropped 34 cents to 984 yen and Tokyo Electric Power fell 2 yen to 159 yen.

Toyota Motor dropped 40 yen to 3,015 yen and Honda Motor Co. slumped 30 yen to 2,549 yen and Nissan Motor Co Ltd decreased 16 yen to 746 yen.

Tokyo Steel plunged 4% after it said it plans to lower prices for all products from July. The news also knocked off other steel makers. Osaka Steel declined 7%, Mitsubishi Steel fell 4% and JFE Holdings dropped more than 2%.

Sony Corp slipped 6 yen to close at 1,066 yen and Panasonic Corp closed down at 8 yen to 584 yen. Toshiba slides 4 cents to 292 yen.

Olympus Corp plummeted 37 yen to 1,199 yen, Nikon dropped 51 yen to 2,344 yen and Fanuc Ltd declined 250 yen to 13,170 yen. Canon Inc slumped 40 yen to 3,200 yen.

Komatsu Ltd shrank 28 yen to 1,911 yen and Hitachi Construction Machinery Co slid 19 yen to 1,502 yen.

Inpex Corp up 0.1% to 448,500 yen and Japan Petroleum Exploration Co. decreased 20 yen to 3,065 yen.

Mitsui O.S.K. Lines, Ltd rose 1 yen to 291 yen; Kawasaki Kisen Kaisha, Ltd unchanged to 156 yen and Nippon Yusen K.K. fell 3 yen to 215 yen.

Fast Retailing Co. dropped 210 yen to 15,390 yen and J. Front Retailing Co. Ltd added 4 yen to 375 yen. Fast Retailing fell after cautious comments from a brokerage firm saying that the stock price reflects all probable good news in the near term.

Mitsubishi UFJ Financial Group fell 3 yen to 360 yen and Sumitomo Mitsui Financial Group decreased 13 yen to 2,480 yen. Nomura Holdings, Inc slipped 5 yen to 273 yen.

Credit Saison Co Ltd declined 31 yen to 1,534 yen.

Tokyo Tatemono Co., Ltd fell 1 yen to 279 yen and Mitsui Fudosan slumped 12 yen to 1,379 yen and Sumitomo Realty & Development Co. added 2 yen to 1,742 yen.

Nippon Steel decreased 3 yen to 175 yen and JFE Holdings Inc dropped 31 yen to 1,304 yen.