Nikkei Plunges 3% Following Shanghai Rout

Hiruki Nakamura
04 Jan, 2016
New York City

Nikkei in Tokyo plunged more than 3% following on a growing worries of slowdown in China and rising tensions in the Middle East. Fujifilm may consider bidding for medical business of Toshiba Corp.

[R]4:30 PM Tokyo – Nikkei in Tokyo plunged more than 3% following on a growing worries of slowdown in China and rising tensions in the Middle East. Fujifilm may consider bidding for medical business of Toshiba Corp.[/R]

Nikkei average in Tokyo dropped more than 3% on the first day of 2016 trading after market indexes in China plunged 7% and markets were halted.

The latest rout in Chinese stocks was sparked by the manufacturing contraction for the tenth month in a row according to a private survey and rising tensions in the Middle East also played into the weak sentiment.

The Nikkei 225 Stock Average tumbled 582.73 or 3.1% to 18,450.98 and the broader Topix index declined 37.63 or 2.4% to 1,509.67.

The yen dropped against the U.S. dollar to 118.89.

Crude oil surged 1.6% and gold gained after tensions between Saudi Arabia and Iran flared up after Saudi Arabia cut diplomatic ties with Iran.

Saudi Arabia executed 47 on terrorism charges including a shite cleric and that sparked a wave of protest in Tehran directed at Saudi Arabian Embassy.

Stocks in Review

Aeon Co Ltd declined 3.2% to 1,808 yen after the financial services provider said it will start to offer the automated teller machines that identify account holders by their fingerprints from late March. The company plans to launch with 5,500 machines.

The company said at initial stage, cash withdrawals and remittances will be limited to 1 million yen per day and customers will not need to use bank cards.

Fujifilm Holdings Corp slumped 2.6% to 4,946 yen after the films, cameras and optical devices maker said it is interested in acquiring medical equipment unit of Toshiba Corporation.

Toshiba is dealing with an accounting scandal and the conglomerate is looking to focus on semiconductor and nuclear power businesses and eliminate or sell other businesses.

Mitsui & Co Ltd decreased 1.1% to 1,429.50 yen after the trading company led consortium with Oman-based Dhofar International Development and Investment Holding Co to develop the power generation plants.

The Ibri power plant consists 1,450 megawatts and Sohar-3 with 1,700 megawatts and are estimated to cost a total of 276 billion yen or $2.3 billion.