Nikkei Drops 1.8%, in the Week

123jump.com Staff
03 Aug, 2007
New York City

Nikkei edged lower for the day rounding off the week with a loss of 1.8%. The index caught in a downward draft generated from credit worries in the U.S. housing market has been trying fight back on the back of rising earnings. Sumitomo Realty reported sharply higher earnings reflecting rising apartments values in Tokyo. Asahi Brewries earnings fell. Furukawa Electric reported disappointing earnings. Kubota Corp earnings jumped 6%.

[R]7:00AM New York, 8:00PM Tokyo – Nikkei closed 1.8% lower for the week.[/R]

Nikkei 225 in Tokyo closed or 4.25 or 0.03% to 16,979.86. For the week Nikkei lost 1.81% and Topix lost 1.6%. Despite a week of widening credit problems in the U.S. markets in Asia and Europe stabilized. The yen jumped above 119 for a dollar helping export sensitive stocks.

Sumitomo Realty & Development Company jumped 4.5% after the company reported first quarter earnings gain of 54% to 30 billion yen. The net income increase at the company has tracked rising real estate values in Tokyo and other locations in Japan. Central Tokyo has seen prices gain sharply in the last one year on tight inventory supplies. Mitsui Fudosan and Mitsubishi Estates gained 1.5%. Mitsubishi Estate income jumped three times on higher condo prices in Tokyo.

Asahi Breweries, Ltd reported its first half revenue gain of 1.2% to 672.6 billion yen and ordinary earnings fall of 10.2% to 26.6 billion yen. Net income declined 5% to 13.7 billion yen from a year ago. Net income per share was reported at 29.12 yen. Net income margin for the first half declined to 2.1% from 2.2% a year ago. The company guided for the fiscal year 2007 ending in Dec 31, 2007 net revenue gain of 2.9% to 1.448 trillion yen and net income gain of 0.5% to 45 billion yen.

Furukawa Electric fell 6% after reporting earnings decline of 40% in the second quarter. The maker of plastics, metals, and optical products in the fiscal year 2006 reported net revenue of 1.1 trillion yen and net income of 30 billion yen on a net margin of 2.7%.

Kubota Corporation reported first quarter revenue increased 6.3% to 269 billion yen and net income gain of 7% to 24 billion yen. Earnings per share in the quarter were reported at 93 yen or 76 American cents per ADS. Revenue growth in the quarter declined to 6.3% from 13.7% from a year ago. The company guided for the next quarter revenue gain of 0.4% to 560 billion yen and net income decline of 16.5% to 37 billion yen. For the fiscal year ending in March 2008 the company expects to generate net revenue of 1.14 trillion yen and net income of 76 billion yen.

The stock has underperformed in the last one year compared to its peers in machinery companies in Japan and its global peers in farm and machinery equipment.

Asian markets closed higher in the region on the bank of rising indexes in New York and European trading. Shanghai led the regions gainers for the second day with a rise of 3.5% followed by a gain of 1.2% in South Korea and Taiwan, 1% rise in India and Thailand. Hong Kong added 0.4% and Australia edged a fraction higher. Philippines led the decliners in the region with a loss of 0.2% followed by fractional losses in Japan and Indonesia.