Nikkei Declines, Sumitomo to Invest in Barclays

123jump.com Staff
20 Jun, 2008
New York City

Stocks in Japan fell after weakness in financial stocks kept broader averages lower. China hiked its fuel prices by as much as 18% inflation in India surged to 13-year high. In Tokyo trading Nikkei 225 declined 1.33% or 188.09 to 13,942.08, falling 0.2% for the week, and the broader Topix Index fell 1.4% to 1,356.74.

[R]5:00AM New York, 7:00PM Tokyo - China increases energy prices. Tokyo drops 0.2% for the week.[/R]

Japan market averages fell as moves by Beijing to increase oil and electricity prices led to declining global oil prices on the expectations that demand for crude oil may fall. Exporters also edged lower on a strengthening yen. Inflation in India surged to a record 13-year high and producer price index in Germany and in China are on the rise.

Market sentiment

In Tokyo trading Nikkei 225 declined 1.33% or 188.09 at 13,942.08, falling 0.2% for the week, and the broader Topix Index fell 1.4% or 18.86 at 1,356.74.

In the first section of the Tokyo Stock Exchange 9.6 billion shares valued at 934 billion yen changed hands and in the second section 188 million shares valued at 3.2 billion yen changed hands.

Of the Nikkei 225 stocks 24 gained, 192 declined, and 9 were unchanged. Mitsubishi Paper led advancers in the index shares with a rise of 3.45% followed by Kyowa Hakko Kog rising 2.66%.

China increases energy prices

The National Development and Reform Commission NDRC said on its Web site last night that the prices of gasoline and diesel will gain by 1,000 yuan a ton and aviation fuel prices will increase by 1,500 yuan a ton.

However the prices of natural gas and liquefied petroleum gas will remain unchanged.

Also the retail prices of gasoline and diesel oil will be increased by 16% and 18% to 6,980 yuan and 6,520 yuan a ton correspondingly. Retail gasoline prices will increase 0.8 yuan per liter for gasoline and diesel oil will increase 0.92 yuan per liter.

According to the report, Beijing will also increase electricity prices by an average 0.025 yuan a kilowatt-hour on July 1, a rise of 4.5%. The NDRC will also impose temporary caps on thermal-coal price until the end of the year which has increased nearly 80% in the last two years.

Crude oil prices dropped 3.5% to $131.93 a barrel yesterday.

Sumitomo Mitsui to inject 100 billion yen in Barclays

The Nikkei News reported on its Website today that Sumitomo Mitsui Banking Corp. is in the final stages of negotiations with Barclays Plc to inject 100 billion yen capital to improve its capital ratio to.

Gainers & Losers

Mitsubishi Paper led advancers in the Nikkei 225 index shares with a rise of 3.45% followed by rises in Kyowa Hakko Kog of 2.66%, in Asahi Kasai Corp. of 1.89%, in Sky Perfect JSAT of 1.85%, and Fast Retailing of 1.68%.

GS Yuasa Corp led decliners in the Nikkei 225 index shares with a drop of 7.79% followed by losses in UBE Industries of 5.26%, in Japan Tobacco of 5.10%, in Sanyo Electric of 5%, and NGK Insulators of 4.79%.

Commodity stocks slid after China increase prices of crude oil prompting global crude oil prices to fall 3.5% to $131.93 a barrel. Inpex slumped 3.73% as a result.

Exporters also slid after the yen gained to 107.87 from 107.88 against the dollar. Canon slid 0.18%, Sony declined 2.30% and Toshiba Corp fell 3.38%.

World market review

In Tokyo Nikkei 225 Index closed lower 188.09 or 1.33% to 13,942.08, in Hong Kong Hang Seng index decreased 52.01 or 0.23% closed to 22,745.60. In Australia ASX 200 index lower 78.30 or 1.46% to close 5,288.30. In Malaysia KL Composite index increased 10.28 or 0.86% closed to 1,206.67.

In South Korea Kospi Index decreased 9.72 or 0.56% to close at 1,731.00, in Thailand SET index closed higher 26.44 or 3.56% to 768.90 and Indonesia JSE Index edged decreased 1.29 or 0.05% to 2,371.78. Sensex index in India decreased 516.70 or 3.42% to 14,571.29.