Nikkei Drops to 6-Week Low

Nigel Thomas
24 Jul, 2012
New York City

Stocks in Japan inched lower on the widening debt contagion in Spain and a downgrade on the advanced nations in the currency union. Toshiba declined 5% after the chipmaker plans to cut flash memory production by 30%. Sharp dropped to another 34-year low.

[R]7:00 PM Tokyo – Stocks in Japan inched lower on the widening debt contagion in Spain and a downgrade on the advanced nations in the currency union. Toshiba declined 5% after the chipmaker plans to cut flash memory production by 30%. Sharp dropped to another 34-year low.[/R]

Stocks and indexes in Tokyo declined after another round of worries resurfaced in the euro zone.

Late Monday, Moody''s Investors Service downgraded its rating outlook on Germany, the Netherlands and Luxembourg to “negative” from “stable.” The debt rating agency cited rising cost of additional bailouts and the possible exit of Greece from the currency union.

The international lenders meet today to assess Greece’s progress in meeting its deficit target and many private estimates suggest the nation is not likely to meet the financial targets set by three international lenders.

Separately, a private survey in China indicated manufacturing growth in July at the slowest pace.

The Nikkei 225 Stock Average fell 20.23 to 8,508.32 and the broader Topix index slid 2.95 to 717.67. The data from the Tokyo Stock Exchange showed short sellers accounted for 32.7% of total sales on Monday, a sign for a market rebound.

The euro edged lower to 94.82 yen after the latest downgrade of German debt.

Stock Movers

Toyota Motor declined 35 yen to 2,880 yen, Honda Motor Co. slumped 23 yen to 2,418 yen and Nissan Motor Co Ltd closed unchanged at 717 yen.

Canon Inc dropped 1.5% to 2,702 yen. , Seiko Epson Corp gained 4.2% to 614 yen and Ricoh Co Ltd added 0.4% to 531 yen.

Sony Corp edged down 1 yen to 918 yen and Panasonic Corp gained 10 yen to 510 yen. Toshiba plunged 15 yen or 5.4% to 261 yen. Olympus Corp declined 38 yen to 1,309 yen and Nikon slipped 10 yen to 2,200 yen.

The better than expected data on Chinese manufacturing lifted equipment maker stocks.

Fanuc Ltd gained 80 yen to 12,370 yen, Komatsu Ltd increased 16 yen to 1,671 yen and Hitachi Construction Machinery Co added 16 yen to 1,314 yen.

Toshiba declined 5% to 261 yen and traded at a 3-year low after the technology company said it will cut production of flash memory by 30% on weak demand for storage devices.

Sharp declined 1.7% to 34-year low after the Nikkei business daily speculated that the company is expected to declare a June quarter loss of 100 billion yen on the weakness in the LCD panel and solar panel prices.

Yamada Denki slumped 1.1% to 3,685 yen. Nitori Holdings Co closed down 0.8% to 7,490 yen, apparel retailer Shimamura decreased 1.3% to 9,020 yen and Sagami Co rose 1 yen to 99 yen.

Fast Retailing Co. gained 110 yen to 15,840 yen and J. Front Retailing Co. Ltd added 1 yen to 392 yen.

Kajima Corp closed unchanged at 217 yen and Taisei Corp slid 3 yen to 210 yen. Sekisui House Ltd fell 0.3% to 746 yen and Daito Trust Construction Co Ltd dropped 0.8% to 7,670 yen.

Tokyo Tatemono Co., Ltd fell 2 yen to 266 yen and Mitsui Fudosan decreased 18 yen to 1,432 yen and Sumitomo Realty & Development Co. declined 32 yen to 1,818 yen.

Kansai Electric Power Company, Inc plummeted 37 yen to 646 yen and Tokyo Electric Power added 2 yen to 130 yen.

Inpex Corp rose 0.2% to 440,000 yen and Japan Petroleum Exploration Co. increased 32 yen to 2,937 yen.

Mitsui O.S.K. Lines, Ltd fell 1 yen to 227 yen; Kawasaki Kisen Kaisha, Ltd gained 3 yen to 109 yen and Nippon Yusen K.K. closed down 3 yen to 170 yen.

Mitsubishi UFJ Financial Group fell 1 yen to 358 yen and Sumitomo Mitsui Financial Group increased 12 yen to 2,384 yen. Nomura Holdings, Inc added 1 yen to 252 yen.

Tokio Marine down 0.6% to 1,809 yen and Mito Securities rose 0.8% to 131 yen.

Credit Saison Co Ltd gained 16 yen to 1,722 yen.

Nippon Steel fell 1 yen to 150 yen and JFE Holdings Inc decreased 7 yen to 1,018 yen.