Nikkei Plunges 2.6% on Emerging Markets Worries

Hiruki Nakamura
20 Aug, 2013
New York City

Volatile Nikkei index in Tokyo dropped 2.6% and Japan posted its thirteenth monthly trade deficit in a row as trade gap doubles from a year ago month in July to 1 trillion yen. Emerging markets linked stocks declined.

[R]4:30 PM Tokyo – Volatile Nikkei index in Tokyo dropped 2.6% and Japan posted its thirteenth monthly trade deficit in a row as trade gap doubles from a year ago month in July to 1 trillion yen. Emerging markets linked stocks declined.[/R]

Stocks in Tokyo opened lower and market indexes quickly descended in thin trading as investors and traders stayed away for vacations.

Trading volume in Tokyo was just above the half of daily average and most of trading concentrated on large banks and financial services companies.

In addition, stocks linked to emerging markets led the decliners. Suzuki Motor Corp which sells more cars in India than in Japan fell more than 4%.

Daihatsu Motor Co Ltd which relies for most of its sales in Indonesia plunged 6% and Yamaha Motor Co Ltd declined 4%.

The Nikkei 225 Stock Average declined 361.75 or 2.6% to 13,396.38 and the Topix dropped 23.86 or 2.1% to 1,125.27.

Trade deficit in July widened to 1.02 trillion yen from 993.9 billion yen in June, the Finance Ministry said on Monday. The deficit soared in the month from a year ago.

Exports climbed 12.2% and imports jumped 19.6%. The petroleum imports increased to 1 trillion yen and led the imports categories.

The yen weakened to 97.73 against one dollar.

Stocks in Review

Toyota Motor Corp slipped 160 yen to 6,160 yen and Honda Motor Co. dropped 155 yen to 3,645 yen. Nissan Motor Co Ltd declined 29 yen to 1,002 yen.

Sony decreased 48 yen to 1,927 yen and Softbank Corp slumped 70 yen to 6,250 yen. Fast Retailing Co. plunged 1,050 to 31,150 yen.

All Nippon Airways Co., Ltd fell 0.9% to 206 yen after the airliner said its low-cost carrier business will be named ""Vanilla Air"" from November and become part of AirAsia Japan.

Mitsubishi Corporation, agreed to acquire two new solar projects in France based Crucey 60 megawatts and Massangis 56 megawatts from Diamond Generating Europe, Limited.

Mitsui & Co Ltd dropped 2.5% to 1,371 yen after the diversified trading company and U.S. private equity firm Carlyle Group submitted bids for Quality Healthcare Medical Services which was sold by India based Fortis Healthcare Limited for approx $300 million.

Private equity firm TPG Capital and Thomson Medical controlled by Singapore based tycoon Peter Lim were also on the bidders list.

Fortis Healthcare, loss of $36 million in the first quarter ended in March.