Consumer Confidence Declines

123jump.com Staff
13 Mar, 2008
New York City

Stocks in Japan fell in Thursday trading after the consumer confidence declined and crude oil price reached another record. The dollar also fell to a 12-year low against yen after it dipped below 100 yen mark. In Tokyo trading Nikkei 225 plunged 3.33% or 427.69 to 12,433.44, and the broader Topix Index fell 3.1% or 39.26 to 1,215.87.

[R]5:00AM New York, 7:00PM Tokyo - Doubts of U.S. plan and strengthening yen affect Tokyo[/R]

Japan stock averages declined after investors faced a spate of negative news. Record price in crude oil stoked fears of inflation, strengthening yen is likely to crimp profits at exporters, and deteriorating consumer confidence hurt the investor sentiment.

Market Sentiment

In Tokyo trading Nikkei 225 plunged 3.33% or 427.69 to 12,433.44, and the broader Topix Index fell 3.1% or 39.26 to 1,215.87.

In the first section of the Tokyo Stock Exchange 8.2 billion shares worth 924 billion yen were traded and in the second section 383 million shares valued at 6.5 billion yen changed hands.

Of the Nikkei 225 stocks 13 rose, 211 declined and 1 was unchanged. Inpex Holdings led advancers in the Nikkei 225 index shares with an increase of 5.08% after oil prices jumped to a record per barrel yesterday as the dollar continued to slide.

Oil prices rise

Oil prices yesterday rose above $110.22 per barrel as the dollar declined to as low as $1.55 against the euro. The crude oil prices increased despite the increase in U.S. stockpiles to 6.2 million barrels.

Shinsei bank revises earnings on subprime losses

Shinsei Bank revised upwards its full-year consolidated earnings forecasts after selling its headquarters building in the Uchisaiwaicho district of Tokyo to Morgan Stanley for 118 billion yen.

Dolphin Japan Investment an entity within the Shinsei Group and holds a beneficiary interest in the headquarters building, expects to record a gross gain of 66 billion yen, while Shinsei Bank through its equity interest in Dolphin Japan Investment expects to record a net gain of approximately 56 billion yen.

The bank revised its consolidated earnings forecast from 50 billion yen to 65 billion yen and the non-consolidated earnings forecast from 43 billion yen to 50 billion yen for the fiscal year to March 31.

Consumer confidence falls

The Cabinet Office reported in the Development of the Consumer Confidence Index yesterday that Japan’s consumer confidence fell from 37.5 in January to 36.1 February, overall livelihood index declined to 33.7 from 35.1 in January, income growth fell to 38.9 from 39.4 and employment index fell to 37 from 38.6 respectively.

Also consumers’ willingness to buy slid to 34.8 in February from 36.7 a year month earlier.

Gainers & Losers

Inpex Holdings led advancers in the Nikkei 225 index shares with a rise of 5.08% followed by increases in Showa Shell of 3.19%, in Trend Micro Inc. of 1.73%, in Mitsui & Co. of 1.11%, and Mitsui Chemicals of 0.90%.

Inpex rose after the price of crude oil prices increased to above $110 per barrel yesterday as the dollar edged lower against the yen from $102.91 to $100.17 at the close of trading.

T&D Holdings led decliners in the Nikkei 225 index shares with a plunge of 8.01% followed by losses in Pioneer Corp. of 7.29%, in Sumitomo Mitsui Financial Group of 7.25%, in Mitsumi Electric Co. of 6.90%, and Mitsubishi UFJ Financial Group of 6.84%.

Financial stocks fell after economists said that the U.S. Fed led plan in partnership with central banks in Europe to inject to $200 billion in bond markets was a temporary intervention which will not solve the current difficulties. The $200 billion injection in the mortgage bonds markets worth $7 trillion will have a very little impact on the liquidity in the market.

Other financial stocks fell as a result. Sumitomo Trust & Banking slipped 6.82% and Mizuho Financial Group dropped 6.78%.

Toshiba’s operating profit to decline

The Nikkei news reported today that Toshiba will take a charge of 100 billion yen this year on costs to withdraw from its HD DVD business.

Operating profit at the business is forecasted to decline by 40 billion yen to 250 billion yen.