Nikkei in Tokyo Drops 0.8%, Nidec Surges on Buyback Plan

Hiruki Nakamura
23 Jan, 2014
New York City

Nikkei in Tokyo fell 0.8% following Asia-wide sell-off after a private survey indicated a contraction in manufacturing growth in China. The yen traded near its 2-year low. Nidec gained 6% after the company raised its full-year net income outlook and launched a buyback program.

[R]4:30 PM Tokyo – Nikkei in Tokyo fell 0.8% following Asia-wide sell-off after a private survey indicated a contraction in manufacturing growth in China. The yen traded near its 2-year low. Nidec gained 6% after the company raised its full-year net income outlook and launched a buyback program.[/R]

Stocks in Tokyo and in Asia declined after a preliminary private survey in China suggested a contraction in manufacturing sector in China. Machinery and equipment maker led the decline in Tokyo.

The Purchasing Manager’s Index declined to 49.6 in January from 50.5 in December, tracked by HSBC and Markit.

The government estimate of manufacturing industry growth is scheduled two weeks from today and the government survey is based on a larger sample of companies and is heavily weighted in state controlled enterprises.

Chinese government has been engineering economic slowdown for the last two years and China confirmed on Monday that the economic growth has slowed to a 14-year low in the final quarter of 2013, still healthy growth rate above 7%.

The Nikkei 225 Stock Average slipped 125.07 or 0.8% to 15,695.89 and the Topix index fell 12.11 to 1,287.52.

The yen gained to 104.33 against the U.S. dollar.

Stocks in Review

Toyota Motor Corp dropped 84 yen to 6,256 yen, Honda Motor Co slid 26 yen to 4,095 yen and Nissan Motor Co Ltd slumped 24 yen to 934 yen.

Sony rose 4 yen to 1,764 yen.

Softbank Corp declined 306 yen to 8,539 yen. Fast Retailing Co lowered 15 yen to 38,825 yen.

Mitsubishi Motors Corporation slid 0.6% to 1,160 yen after the automobile company plans to raise approx 257.1 billion yen or $2.5 billion at 1,120 yen or $10.73 per share through the sale of as many as 241 million shares.

The carmaker estimated sales in the year ending March to soar 16% to 2.11 trillion yen and net income more than double to 100 billion yen.

Nidec Corporation climbed 5.6% to 11,715 yen after the electric micro-motor maker reported net sales in the third-quarter ending in December jumped 23.6% to 646.7 billion yen from 523.2 billion yen a year ago.

Net income in the quarter climbed 58.9% to 43.05 billion yen compared to 27.09 billion yen and diluted earnings per share jumped to 297.23 yen from 187.80 yen a year earlier.

The company forecasted net sales in the fiscal 2014 to rise 3.5% to 880 billion yen and net income to grow 1.8% to 56 billion yen.