Nikkei Trades Down 1.1%, December Retail Sales Fall 0.3%

Hiruki Nakamura
29 Jan, 2015
New York City

Nikkei in Tokyo fell more than 1% after seasonally adjusted monthly retail sales slipped 0.3% in December. In addition, stocks fell after U.S. Fed in its statement cited weak global economic growth. Skymark Airlines plunged 25% after filing bankruptcy protection. Nintendo tumbled 8%.

[R]4:30 PM Tokyo – Nikkei in Tokyo fell more than 1% after seasonally adjusted monthly retail sales slipped 0.3% in December. In addition, stocks fell after U.S. Fed in its statement cited weak global economic growth. Skymark Airlines plunged 25% after filing bankruptcy protection. Nintendo tumbled 8%.[/R]

Investors also took a note of positive tone of the statement released by the U.S. Federal Reserve after a two-day meeting. However, the central bank also cited weak international markets and global economic growth risks.

Fed issued the most optimistic outlook for the economy in several months and said job market is improving and inflationary forces have weakened largely on the account of a sharp fall in oil prices.

However, Fed held out for a possible rate increase at its June meeting and the central bank is scheduled to meet two more times in the next five months.

U.S. Federal Reserve has pumped nearly $4 trillion to stabilize the economy after the financial and housing market crisis wiped out nearly 15 million jobs between 2008 and 2011.

The Ministry of Economy, Trade and Industry said retail sales in December increased 0.2% to 13.52 trillion yen missing estimate to increase of 0.9% and decline from 0.5% jump in November.

On a seasonally adjusted monthly basis, retail sales slipped 0.3% followed by 0.2% fall a month ago.

The Nikkei 225 Stock Average dropped 189.51 or 1.1% to 17,606.22 and the broader Topix index slumped 16.34 to 1,413.58.

The yen closed at 118.04 against one dollar.

Stocks in Review

Nippon Steel & Sumitomo Metal Corp slipped 1.9% to 289.10 yen after the steelmaker reported net sales in the nine-month period ending in December jumped 3.6% to 4.18 trillion yen from 4.04 trillion yen a year ago period.

Net income in the period declined 20.3% to 153.59 billion yen compared to 192.78 billion yen and earnings per share dropped to 16.83 yen from 21.20 yen in the same period a year ago.

The steelmaker forecasted net sales for the year ending in March of about 650 billion yen but lowered its net profit estimate to about 180 billion yen and to 20 yen in earnings per share.

Nintendo Co., Ltd plunged 8.7% to 11,235 yen after the gaming machines and software maker lowered consolidated operating profit forecast for the year ending in March to 20 billion yen.

Shinsei Bank Ltd dropped 1.9% to 204 yen after the financial service provider reported total revenues in the nine-month period ending in December soared 23.5% to 175.6 billion yen from 152 billion yen a year ago period.

Net income in the period surged 23.9% to 58.1 billion yen compared to 34.2 billion yen and earnings per share jumped to 19.73 yen from 10.43 yen in the same period a year ago.

The bank estimated net profit for the year to jump 14.5% to 63 billion yen and diluted earnings per share at 23.73 yen.

Skymark Airlines Inc tumbled daily limit of 25% to 237 yen after the airline company plans to file bankruptcy and restructure operations under the Civil Rehabilitation Law with the Tokyo District Court.

The company faces demands to pay as much as 70 billion yen against penalties on cancellation of contract to purchase six A380s from the European aircraft maker Airbus.

The company''s shares were de-listed following the bankruptcy filing.

Sumitomo Dainippon Pharma Co Ltd fell 0.6% to 1,208 yen after the pharmaceutical company said net sales in the nine-month period ending in December slipped 1.9% to 279.14 billion yen from 284.52 billion yen a year ago period.

Net income in the period slid 0.9% to 18.99 billion yen compared to 19.16 billion yen and earnings per share fell to 47.81 yen from 48.22 yen in the same period a year ago.