Nintendo Earnings Lift Nikkei from 1.5% Loss

123jump.com Staff
25 Jul, 2007
New York City

Nikkei 225 Index declined 0.8% at close after recovering from a loss of 1.5% at mid-day. Nintendo earnings, sharply higher than expected lifted the average from its worst level in the day. Nintendo earings and revised annual earnings forecast lifted the market. Exporters declined in sympathy with losses in New York trading but shipping companies recovered at the close. Nomura reports earnings jump of more than three-fold.

[R]6:30AM New York, 6:30PM Tokyo – Oil complex stocks and leading exporters lead a sell-off in Tokyo. Shipping companies recover at close[/R]

Asian markets decline following sharp declines in Europe and America in the overnight trading. Philippines led the region with a loss of 1.6% followed by 1.2% decline in Australia, 0.8% decrease in Japan, and 0.6% fall in India. Hong Kong edged 0.5% lower but Shanghai advanced 2.7%.

In Tokyo trading Nikkei 225 fell 143.61 to close at 17,858.42 on weak oil and sharp fall in New York trading. The index recovered from its mid-day trading losses of 1.5% to close only 0.8% lower.

Nintendo stock rebounded 6% from a loss of 2.5% to 3.5% at close during the day. Nintendo reported first quarter earnings of 80.3 billion yen from 15.6 billion a year ago and revised its annual earnings projection to 245 billion. The sharp revision in earnings 41% from an earlier projection lifted the stock and trading sentiment in the market. Nintendo also pays out high percentage of its earnings in dividend.

Nomura Holdings reported first quarter earnings of 76.7 billion yen compared to 20.1 billion yen from a year ago on higher asset under management and profits in stock trading. The boom is assets to manage retirement accounts in mutual funds helped the largest securities company to reach 30 trillion yen in assets under management. The investment management fees rose 47.3 billion from 29.7 billion and trading and brokerage commissions jumped to 113 billion from 79.6 billion.

Mistukoshi jumped 7% after Nikkei newspaper reported that the company may be exploring merger or other recapitalization plans.

Shipping companies closed higher after facing a sell-off in the morning trading. Kawasaki Kisen Kaisha closed up 2.7% followed by 1.4% gain in Mitsui O.S.K. Lines, and 1.3% in Nippon Yusen K.K.

Victor Company of Japan, popularly known as JVC, unit of Matushita declined 10% on the news that the company has agreed to acquire Kenwood. The worries of earnings dilution hurt the stock.

Lower oil dragged oil trading and refining companies at close. The refiner, Nippon Mining Holdings dropped 2.8% and Nippon oil fell 4%. Inpex, the largest oil explorer edged 3.2% lower.