Nikkei in Japan Plunges 4%

123jump.com Staff
04 Jan, 2008
New York City

Nikkei 225 Index in Tokyo trading fell 4.03% or 616.37 to close at 14,691.41. Broader index Topix fell 4.3% or 63.77 to 1,411.91. Both indexes fell for the first time with a such a large measure on the first trading day of a new year. After the release of weak auto sales in December month in the U.S. Nissan fell 9% and Toyota dropped 3%. Shipping lines fell after the Baltic Dry Index, which gauges prices, slumped for the ninth day in a row by 1.5% as China scaled back its iron ore imports.

[R]6:00AM New York, 8:00PM Tokyo - Automakers, Shipping lines and exporters drag Tokyo down 4.03% on the first day of trading in 2008.[/R]

Japan stock market averages traded in the red on the first day of trading of the year weighed down by heavy losses by automakers as the U.S. auto sales declined.

In Tokyo trading Nikkei 225 dropped 4.03% or 616.37 to 14,691.41, the first fall on the first day of trading since 2001, while the broader Topix Index slumped 4.3% or 63.77 to 1,411.91, the largest decline on the first day of trading since the creation of the index in 1949.

The market was only open for the morning session.

In the first section of the Tokyo Stock Exchange 14 billion shares valued at 1.7 trillion yen were traded and in the section 239 million shares worth 4.3 billion yen changed hands.

Of the stocks in Nikkei 225 index, 5 rose, 219 declined, and 1 was unchanged. Of the index stocks, 23 stocks shed 6% or more.

Sumco Corp led the decliners in the index with a fall of 9.9%, followed by Nissan Motor Corporation shedding 9.2% as the company and Toyota sold fewer cars in the U.S.

Other automakers fell as well. Isuzu Motors dropped 7.5% and Hino Motors Limited plunged 6.9%.

Automakers General Motors Corporation, Ford Motor Company and Toyota Motor Corporation and others reported yesterday that the Americans bought 16.1 million cars and trucks last year, the lowest in nine years.

Toyota Motor Corporations vice president for communications Irv Miller reported yesterday that the company sales fell from 228,322 vehicles from a year earlier to 224,399 vehicles in December. The company also displaced the Ford Motor Company as the second largest seller in the U.S. in 2007 as it sold 3.1% more cars in 2007 to 2.62 million.

However, the automaker reported its sales to the U.S. fell 1.7% in December and also cut its sales forecast for the U.S. market from the projected 3% gain to between 1% and 2%.

U.S. ADP Employers Services, private payroll processing services, reported yesterday that U.S. companies added 40,000 jobs in December compared to a 173,000 increase in November.

Of the Nikkei 225 index shares Sanyo Electric Company led gainers with a rise of 1.95% followed by rises in Inpex Holdings of 0.83%, in Japan Steel Work of 0.79%, in Nikko Cordial Company of 0.54%, and in Dainippon Sumitomo of 0.12%.

Inpex rose after crude oil prices for February delivery reached a record $100.09 per barrel on falling U.S inventories, persistent Middle East tensions, and no signs of a decline in demand from China, India, and the U.S.

Sumco Corporation led decliners in the Nikkei 225 index with a fall of 9.9% followed by losses in Nissan Motor Corporation of 9.2%, in Mazda Motor Corporation of 7.7%, in Mizuho Trust & Banking of 7.7%, and NGK Insulators of 7.6%.

Nissan Motor Corporation fell after it reported that the U.S. sales in December dropped 2.4%.

Shipping lines fell after the Baltic Dry Index, which gauges prices, slumped for the nine days in a row by 1.5% as China scaled back its iron ore imports. Kawasaki Kisen declined 7.10% and Mitsui OSK Lines plunged 5.40%.

Exporters also declined after the yen weakened from 109.39 to 109.40 against the dollar. Canon Inc climbed down 5%, Sony Corporation edged down 6.61% and Casio Computer declined 6.08%.

The Asahi newspaper, on its online publication, reported today that IHI Corp is investigated by the Securities and Exchange Surveillance Commission for falsifying earnings report. The company is expected to be fined 1.7 billion yen if proven guilty of wrongdoing.

IHI Corp in December announced significant revisions in the company’s earnings report for the fiscal year ended March 2007 as well as in the six-month period ended September 2006.

SESC officials are reportedly paying special attention to capital increases totaling 64 billion yen that IHI reported in January and February 2007.

Bloomberg news service reported today that Takeda Pharmaceuticals Company applied to the U.S. Food and Drug Administration to sell Alogliptin as a daily treatment for type-2 diabetes. The new drug is poised to replace Astos and hedge against future losses when Astos pills patent expires in 2011.

Analysts believe the new drug might begin selling in 2009, generating $2 billion per year. Takeda closed down 6.9%.

Nippon Telegraph and Telephone fell on Nikkei News reports the company will cut leasing fees for its fiber optic lines by 7% for the fiscal year starting April. Spokesman for regional unit NTT East Corporation Masaya Suzuki and Yasuhiro Lida for NTT West said they will file proposed new rates with the telecommunications industry by January 15.


[R]5:00AM New York, 9:00PM Sydney- ASX 200 index gained 0.3% after gains in resource stocks[/R]

ASX 200 index gained 0.2% or 12.80 to close at 6,385.40.

The Preliminary market turnover was 1.61 billion, worth a total $3.77 billion, with 640 stocks moving up, 549 moving down, and 336 unchanged.

The most actively traded stock was Gondwana Resources with 131.7 million shares worth $3.3 million.

National Australia Bank Ltd and Australia & New Zealand Banking Group Ltd set the tone for other banks by becoming the first two banks to respond to the global credit market turmoil by increasing their interest rates on mortgages to recover higher funding costs, without action from the central bank.

Australia''s biggest lenders last raised home loan rates without any action from the central bank over ten years ago. National Australia Bank hiked its variable rate for home loans by 12 basis points to 8.69% while ANZ, raised the borrowing charge for some of its products by 25 basis points to 8.44% and 8.54%.

The central bank last increased its key rate by a quarter of a percentage point, or 25 basis points in November resulting in its benchmark rate rising to an 11-year high of 6.75% as it sought to stem inflation after concerns that the economy''s expansion was likely to be inflationary.

Westpac and Commonwealth Bank of Australia officials said the two banks were also reviewing their charges. National Australia Bank gained 1%, ANZ rose 0.3%, Commonwealth gained 0.5% percent and Westpac banking was up 0.2%.

Centro Properties Group today disclosed that it has just 50% of its Australian dollar borrowings hedged and 40% of its U.S. dollar borrowings. The latest development comes after the group''s failure to extend interest rate hedges on its debt.

The Group said that any interest rates changes might result in a cut in its earnings. Centro the Australian owner of U.S. malls that put itself up for sale and invited bids of its assets as it struggled to raise money to refinance its $3.9 billion of debt.

The group lost 90% of its market value over two days in December resulting in it becoming the worst Asian casualty of the global credit squeeze. Centro shares closed up 14.7% and Centro Retail Group rose 2.6%.

Energy Resources of Australia Ltd today indicated that it has been forced to halt mining activities at its Ranger operation in the Northern Territory due to heavy rain from Tropical Cyclone Helen.

The Australian Bureau of Meteorology indicated that tropical Cyclone Helen may cross the coast and move closer to Ranger and Alcan Inc.''s Gove alumina refinery as early as tonight.

Energy Resources missed contracted deliveries last year after a flood at Ranger stopped production in February. The company''s share fell 0.2% after rising as much as 2.1% during trade.

Rams Home Loans said it has completed the sale of its brand and distribution business to Westpac. The company was Australia''s first high profile casualty of the subprime crisis.

RAMS Home Loans Group has been renamed RHG Ltd with effect from today. RAMS outgoing chief executive Greg Kolivos has been replaced by Glenn Goddard.

The sale follows the October approvals by RAMS shareholders of the sale of the group''s franchise network and all of the future business it writes to Westpac, at $140 million with RAMS retaining its existing mortgage book.

RAMS stock was up 3.3%.

The Australian dollar rose to 0.9589 from 0.9540 yesterday. The dollar has been falling from 0.9837 late last week, after investors decided to reduce holdings of higher yielding assets bought with Japanese loans following losses in global stock markets.

Of the ASX 200 index shares, Centro Properties led the gainers with a rise of 14.7% followed by increases in Lynas Corp Limited of 11%, in Aquarius platinum of 6.4%, in ABB Grain Limited of 4.8%, and in Macmahon Holdings of 4.4%.

Of the ASX 200 index stocks Fortescue Metals led the decliners with a fall of 6.5% followed by losses in APN News & Media of 6%, in Pacific Brands of 5.3%, in Flight Centre of 3.9% and in Boart Longyear of 3.8%.

In Tokyo Nikkei 225 Index closed lower 616.37 or 4.03% to 14,691.41, in Hong Kong Hang Seng index closed higher 632.41 or 2.35% to 27,519.69, in Australia ASX 200 increased 12.80 or 0.20% to close 6,385.40.

In South Korea Kospi Index close higher 11.17 or 0.60% to close at 1,863.90, in Thailand SET index closed lower 10.92 or 1.31% to 821.71, and Indonesia JSE Index edged higher 50.13 or 1.85% to 2,765.19. Sensex index in India closed higher 341.69 or 1.68% to 20,686.89.