Tech Stocks Pull Japan Lower

Ivaylo
10 Aug, 2006
New York City

Selling pressure in Japan was eased somewhat by corporate-goods-pricing data out in the morning, indicating a larger-than-expected year-on-year rise of 3.4%.The figures point to strong demand and robust corporate activity. The markets in Hong Kong and South Korea also sank. Shanghai Composite was the only index to buck the downtrend.

[R]7:15AM Asian markets slip, Japan lower as Sony and Sharp plunge.[/R]
Asian markets were lower in Thursday trading. The Nikkei finished the day down 0.16% at 15,630.91. Trading was cautious as investors awaited quarterly GDP data, which will be released Friday. Electronics exporters Sony Corp. and Sharp Corp. both declined about 1%. Mobile service provider NTT DoCoMo advanced 1.8% on hopes the company will gain subscribers after number portability regulations go into effect in October.

Suzuki Motor moved up 1.6% after saying Wednesday it was lifting its full-year sales outlook to 3 trillion yen from 2.8 trillion yen. The company also said it would build a new plant in Japan to help satisfy strong demand for small cars. It will be Suzuki''s first new Japanese factory in more than three decades. Nissan Motor advanced 0.5%. Banks also gained, after better-than-expected machinery-order data released Wednesday suggested a strong market for corporate loans. Mizuho Financial Group was up 1.5%.

Hong Kong''s Hang Seng Index fell 0.72% to 17,222.14 as investors took profit on blue chips including China Mobile and Henderson Land. China Mobile, gaining 4.5% Wednesday, shed 1.1%, while Henderson Land sank by 1.7%. South Korea''s Kospi index slipped 0.81% after the country''s central bank raised interest rates at mid-morning, increasing the call-rate target by 0.25 percentage point to 4.5%.

Australia''s benchmark S&P/ASX 200 slid 0.52% after Telstra Corp reported disappointing earnings before the market opened Thursday. Miners BHP Billiton and Rio Tinto slipped as a strike continued at their Escondida copper mine in Chile. Elsewhere, China''s volatile Shanghai Composite index rose 1.74% after Air China''s Shanghai IPO, recently downsized following a weak response from institutional investors, met with healthy retail demand.

[R]6:30AM European stocks fell Thursday morning on security issues.[/R]
European markets were lower Thursday morning. The FTSE 100 in London dipped 1.4% to 5,781.2, the Xetra Dax sank 2.1% to 5,585.72, the CAC-40 fell 1.5% to 4,952.28. British Airways shed 4%, Ryanair dropped 3.3% and Lufthansa fell 3.8% on security uncertainty and the impact on travel sentiment as UK airports have introduced a ban on all hand baggage on aircraft leaving the UK, on government advice. Ferrovial, owner of UK airports operator BAA, declined 3%.

Tui, the German tourism and shipping group, sank 6.5 per cent to ˆ14.54 as it warned costs at its shipping division would hit this year’s earnings. Securitas, the security services group, fell 9.7 per cent to SKr120.50 after reporting second quarter earnings fell well below forecasts. Deutsche Telekom lost 8.2% after Europe’s biggest telecom group issued a profits warning and reduced its targets for 2006 and 2007. The telecom sector suffered a blow, falling 3.3 %, with Telecom Italia down 2.8%, France Telecom off 3.1% and BT down 2.6%.

Crude oil prices changed little Thursday as the market remained wary of factors influencing supply in the United States, Africa and the Middle East. Light, sweet crude for September delivery gained 9 cents to $76.44 a barrel in electronic trading on the NYME. September Brent crude futures on London''s ICE Futures rose 25 cents to $77.53 a barrel. Gold opened Thursday at a bid price of $653.10 a troy ounce, up from $652.90 late Wednesday.

The euro gained slightly against the U.S. dollar Thursday as traders absorbed a decision by the U.S. Fed to hold off on any interest rate increases. The euro bought $1.2889 in morning European trading, up from $1.2861 in New York late Wednesday. The British pound edged upward to $1.9074 from $1.9049. The dollar was marginally lower against the Japanese currency, slipping to 115.06 yen from 115.23 yen

[R]5:00AM Copper prices reached four-week high on labor strike.[/R]
The most-traded September copper ended up 10.80 cents at $3.71 per pound. December gold advanced $4.70 to settle at $662 a troy ounce. September silver settled up 31 cents at $12.57 an ounce. October platinum closed up $7.00 at $1,263 an ounce and September palladium settled up $2.95 at $326.70 an ounce.

The September crude oil contract finished up 4 cents at $76.35 a barrel. September gasoline moved down 5.41 cents to $2.1722 a gallon. September heating oil edged down 1.01 cents to $2.1063 a gallon. September natural gas closed up 49.3 cents at $7.651 a million British thermal units. On the New York Board of Trade, September Arabica coffee rose 0.55 cent to $1.0765 a pound. October futures on raw sugar in foreign ports gained 0.05 cent to 14.04 cents a pound.