Japan's Nikkei 225 Drops 2%, Tokyo Metro IPO Raises $2.3 B

Akira Ito
16 Oct, 2024
Tokyo

Benchmark indexes in Tokyo dropped sharply, tracking losses in overnight trading in New York. 

The Nikkei 225 stocks average plunged nearly 2%, and the broader Topix index fell more than 1% after tech and energy stocks dropped in New York. 

The S&P 500 index declined 0.8% and the Nasdaq Composite fell 1.1% after the Dutch equipment maker ASML Holding said demand recovery is more gradual than previously estimated. 

Following the ASML's revised outlook, AMD, Nvidia, Broadcom, and Micron Technology declined between 4% and 7%. 

ASML revised its annual revenue estimate to range between Є30 billion and Є35 billion, near the low end of its previous annual outlook. 

The company said net sales in the September quarter were Є7.5 billion and new orders were Є2.6 billion, sharply lower than previously estimated. 

Crude oil plunged 5% after supply-demand imbalances overshadowed Iran-Israel tensions. 

Energy stocks continued to fall after crude oil prices extended losses for the third consecutive day amid worry of lack of demand growth from China and rising supply in the Middle East. 

On the economic front, Japan's core machinery orders, which exclude large and volatile orders for ships and power plants, decreased 1.9% to 858.9 billion yen. 

On an annual basis, private sector machinery orders fell 3.4% in August from a year ago, according to the data released by the Cabinet Office. 

The orders declined for the fifth month in 2024 as orders for manufacturing fell by 2.5% to 388.4 billion yen. 

The yen drifted lower to 149.26 against the U.S. dollar amid rising expectations of the Bank of Japan holding its interest rate steady at the next policy meeting. 

 

Tokyo Metro IPO Priced at Upper End of Filing Range

Tokyo Metro priced its shares at 1,200 yen, and the company plans to list its shares on October 23. 

The widely anticipated public offering was oversubscribed more than 10 times, according to a report by Reuters. 

The local rail service company is planning to sell 290.5 million shares. 

The company is estimating annual revenue in the current fiscal year ending in March 2025 of 407.5 billion and net income of 52.3 billion yen. 

The company is also planning to pay a cash dividend of 40 yen per share from earnings per share of 90.02 yen. 

The Tokyo Metropolitan Government controls 46.6%, and Japan's central government holds the remaining 53.4% stake in the local railroad company. 

 

Japan Stock Movers 

The Nikkei 225 Stock Average decreased 1.7% to 39,225.70, and the broader Topix index dropped 1% to 2,695.51. 

Tech stocks plunged following the sharp decline in leading chipmakers in overnight trading in New York. 

Tokyo Electron dropped 9.2% to ¥24,310.0, Advantest fell 7% to ¥7,865.0, Disco Corp. plunged 5.7% to ¥36,160.0, and Lasertec declined 13.4% to  ¥22,155.0. 

East Japan Railway Company increased 0.1% to ¥2,974.0, West Japan Railway Company decreased 0.8% to ¥2,774.0, and Kyushu Railway fell 2.2% to ¥4,067.0. 

Seven & I Holdings decreased 2.7% to ¥2,224.50, Isetan Mitsukoshi fell 6.6% to ¥2,353.50, and Fast Retailing added 0.1% to ¥53,580.0.