Lower Oil and Gold Prices Drag Japan Stocks

123jump.com Staff
28 May, 2008
New York City

The Nikkei 225 Stock Average lost 1.3% to close at 13,709.44 in Tokyo. The broader Topix index declined 1.4% to 1,348.69. Trading companies accounted for large decline in Topix index. The Topix Mining Index saw the steepest decline among industry groups on the index. Aeon Mall Co. climbed 6.2% to 3,450 yen. NEC Electronics added 3% to 2,370 yen, after announcing plans to spend 10 billion yen to double its production capacity for 300-millimeter wafers.

[R]5:00AM New York, 7:00PM Tokyo - Commodities and U.S. consumer worries drag Tokyo.[/R]

Stocks on Japan fell after crude oil and metal prices slumped. Continued worries over deteriorating consumer sentiment in the U.S. also negatively impacted on investor sentiment.

Market sentiment

In Tokyo trading Nikkei 225 fell 1.32% or 183.87 at 13,709,44, and the broader Topix Index declined 1.4% or 10.56 at 1,348.69.

In the first section of the Tokyo Stock Exchange 8.8 billion shares valued at 954 billion yen were traded and in the second section 199 million shares worth 5.1 billion yen changed hands.

Of the Nikkei 225 index stocks 27 gained, 189 declined, and 9 were unchanged. Toshiba Corp. led advancers in the index shares with a rise of 4.30% followed by Oki Electric Industry Co. increasing 3.81% after the Nikkei reported that the company might sell its chip-making unit to Rohm.

U.S. consumer confidence falls to 16 year low

The U.S. Conference Board reported yesterday that the Conference Board Consumer Confidence Index- based on a representative sample of 5,000 households- fell to a 16-year low at 57.2 in May from 62.8 in April.

The Present Situation Index declined to 74.4 from 81.9, while the Expectations Index fell to 45.7 from 50.0 in April.

Statistics from the Board also show that those claiming business conditions are """"""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""bad"""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""" increased to 30.6% from 26.5%, and those claiming business conditions are """"""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""good"""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""" plummeted to 13.1% from 15.4 % in April.

Despite the percentage of consumers saying jobs are """"""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""hard to get” being unchanged at 28% from 27.9%, those claiming jobs are """"""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""plentiful"""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""" fell to 16.3% in May from 17.1% the previous month.

Says Lynn Franco, Director of The Conference Board Consumer Research Center commented: """"""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""The Consumer Confidence Index now stands at a 16-year low (Oct. 1992, 54.6). Weakening business and job conditions coupled with growing pessimism about the short-term future have further depleted consumers'' confidence in the overall state of the economy. Consumers'' inflation expectations, fueled by increasing prices at the pump, are now at an all-time high and are likely to rise further in the months ahead. As for the short-term outlook, the Expectations Index suggests little likelihood of a turnaround in the immediate months ahead.""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""

Gainers & Losers

Toshiba Corp. led advancers in the Nikkei 225 index shares with a rise of 4.30% followed by increases in Oki Electric Industry Co. of 3.81%, in Mazda Motor Corp. of 3.69%, in Tokyo Electric of 2.55%, and Sky Perfect JSAT of 2.24%.

Toshiba Corp. and other technology stocks rose as JPMorgan Chase & Co. raised its share-price estimate for Taiwan Semiconductor Manufacturing Co.

Utilities rose after crude oil for July delivery fell 2.5% to $128.33 yesterday on concerns that a slowing economy in the U.S. is affecting consumption.

Oki Electric Industry Co. gained after the Nikkei newspaper said today the company might sell its chip-making business competitor Rohm Co. for 100 billion yen by the end of this year.

Yokohama Rubber led decliners in the Nikkei 225 index shares with a drop of 5.57% followed by losses in JKET Corp. of 4.85%, in Nippon Mining House of 4.69%, in Dowa Holdings Co. of 4.65%, and Inpex Holdings of 4.58%.

Commodity stocks fell after gold declined 1.9% on falling oil prices. Silver and copper prices also fell as well.

Sumitomo Metal Mining fell 3.96%, Toho Zinc declined 4.30% and Nippon Oil fell 4.57%.

Company news

Otsuka Pharmaceutical to take 49% stake in Alma Group

Otsuka Pharmaceutical reported today that it has agreed to acquire a 49% stake in French mineral water bottler Alma Group for 750 million euros.

The company contends that the move will help it expand its sales in Europe.


http://www.nni.nikkei.co.jp/CF/FR/MKJ/
http://www.conference-board.org/economics/ConsumerConfidence.cfm
http://www.japantoday.com/category/business/view/otsuka-pharmaceutical-takes-49-stake-in-french-bottled-water-firm
http://www.tse.or.jp/english/market/STATISTICS/e05.html