Tokyo Declines on Resource Stocks

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

Nikkei 225 in Toky fell on a reveral in shipping and resources stocks. Techonology stocks fell ahead of earnings from Sony and Cannon. After the close Cannon reported 17% earnings gain but lower than exepected earnings. Sony reported earnings doubled on 13% rise in sales. The company reported wider loss in its Playstation unit.

[R]6:30AM New York, 7:30PM Tokyo – Japan closed lower on earnings and reversal in resource companies.[/R]

The Nikkei 225 fell 0.88% or 156.33 to close at 17,702.09 on lower metal prices and ahead of election results for the Upper House elections in Japan.

Earnings and weak trading sentiment contributed to the lower close for Asian Markets across the region. Technology, bank, and commodities stocks faced a fractional decline in the region.

South Korea led the region with a 2.03% loss followed by 1.8% decline in Taiwan, 1.5% decrease in Singapore, and 1.2% fall in Indonesia and Australia. India and China led the region with a gain of 0.5% but Hong Kong lost 0.64%.

Nomura Holdings and Nintendo were few companies that managed to gain on a day when most shipping, technology and resource and metals companies led the decline in the index.

Gainers

Nintendo soared 8.8% to 61,800 yen on five-fold earnings and annual earnings revision.

Nomura jumped 6.5% to 2,260 yen after reporting a sharp jump in earnings on higher asset management fees and brokerage commission.

Juki Corp, maker of expensive sewing machines, jumped 12% to 966 yen after reporting earnings surge of 56% to 3.17 billion yen.

Decliners

Ahead of the earnings Canon fell 2.3% to 6,890 yen on the concerns that earnings may miss the target. The decline in Canon led several other technology stocks lower. After the close the company reported earnings gain of 17% to 123.9 billion and lowered its annual earnings forecast by 1% to 500 billion on higher depreciation charges stemming from revised method.

Trading houses, steel and copper manufacturers fell sharply on profit taking. The metal and oil trading companies declined on profit taking in the sector.

Nippon Steel fell 2.9% to 904 yen, Sumitomo Metals plunged 4.5% to 2,960 yen, Mitsubishi Corp lost 2.6% to 3,440 yen. Marubeni declined 4.4% to close at 1,123 yen.

Shipping companies declined on profit taking and worries that recent stock gains may not be justified to reflect the earnings expectations. Kawasaki Kisen Kaisha fell 1.8% to 1,635 and Nippon Yusen dropped nearly 5% but managed close a fraction higher.

After the Close Earnings

Sony Corp reported first quarter earnings of 66.5 billion yen compared to 33.2 billion yen a year ago on revenue gain of 13% to 1.98 trillion yen. Operating profit in the quarter jumped to 99.3 billion yen from 27 billion yen a year ago. Operating income without the currency gain would have been 25.7 billion lower.

PlayStation division reported a wider loss of 29.2 billion yen compared to 26.8 billion yen from a year ago. The company also projected sale of 11 million units for the year, lower than 16.5 million reported by Nintendo during its earnings release.

In the filmed entertainment division sales rose 13% to billion yen with a profit of 3.3 billion yen and Sony Life drove sales in financial division 49% higher and operating profit gain of eight-fold.