Nikkei in Japan Flat, China Growth Slows to 7%

Hiruki Nakamura
15 Apr, 2015
New York City

Market indexes in Japan closed nearly flat after the recent run up in anticipation of higher earnings driven by weaker yen. Drug makers led the decliners. Chip equipment makers dropped after Intel lowered its capital spending plan in the current year.

[R]4:30 PM Tokyo – Market indexes in Japan closed nearly flat after the recent run up in anticipation of higher earnings driven by weaker yen. Drug makers led the decliners. Chip equipment makers dropped after Intel lowered its capital spending plan in the current year.[/R]

Stocks in Tokyo took a breather after the recent rally and ahead of earnings parade from the next week.

Chip equipment makers declined after Intel said it will cut its capital expenditure in the current year to $8.7 billion from $10 billion. The smaller spending is likely to affect revenues at several Korean and Japanese equipment makers.

Seasonally adjusted index of industrial production in February declined 3.1% and shipments slumped 4.4%.

Inventories in the month jumped 1.1% and inventory ratio climbed 4% from a year ago month, the Ministry of Economy, Trade and Industry said today.

On a yearly basis, production dropped 2%.

Also, China reported its slowest economic growth rate in six years. First-quarter economic expansion slowed to 7% as China engineered a slowdown and curb speculation in construction and home building and contain the building up of bad loans at banks.

The Nikkei 225 Stock Average slipped 38.92 or 0.2% to 19,869.76 and the broader Topix index slid 2.01 to 1,588.81.

The yen closed at 119.58 against a dollar.

Stocks in Review

Aeon Co Ltd closed unchanged at 1,589.50 yen and the retailer plans to invest 160 billion yen in general merchandise stores, supermarkets and discount stores in the year ending February 2016, about 60% of investment level in fiscal 2014.

GLP J-REIT slid 0.6% to 127,700 yen after the real estate developer reported net sales in the year ending in February climbed 17.9% to 10.99 billion yen from 9.32 billion yen in a year ago period.

Net income in the period soared 18.2% to 4.70 billion yen compared to 3.97 billion yen and earnings per share jumped to 1,965 yen from 1,893 yen in the same period a year ago.

The retailer forecasted net sales in the first-half to increase 0.6% to 10.93 billion yen and net income to advance 3.1% to 4.55 billion yen.

For the year, the company forecasted revenues to slid 0.3% to 10.96 billion yen and flat net income flat at 4.55 billion yen.

Skymark Airlines Inc closed unchanged at 14 yen after the discount airliner said in the reorganization plan the entire equity capital will be wiped out and reduce debt burden on the company.

As of February 4, assets on the balance sheet were valued at 5.8 billion yen significantly lower than 73.2 billion yen initially claimed and liabilities owed by the airline of about 316.4 billion yen.

Takashimaya Company, Limited fell 0.3% to 1,238 yen after the department store operator reported sales in March plunged 23.8% and sales at four regional stores in Okayama, Gifu, Yonago and Takasaki tumbled 23.7%.

Western region sales declined 21.7% and total sales in the month plummeted 23.7%.

Corporate segment sales dropped 25.9% while sales from the cross-media business segment slumped 16.6%.