Techs Rise, Refiners Fall in Tokyo

123jump.com Staff
16 Jul, 2008
New York City

Stocks in Japan traded in a listless fashion but the broader Topix index declined for the fourth day in a row. Tech stocks rose after Intel reported 25% rise in earnings and lifted its sales guidance. Inpex, the largest refiner fell after crude oil futures prices declined in the region. Realty stocks fell. Sumitomo Mitsui Financial Group has already suffered loss of more than $700 million in its investment in pending Barclays Plc public offering at a fixed price.

[R]5:00AM New York, 7:00PM Tokyo - Japan’s service demand falls 0.2% in May on a day of calm trading.[/R]

Stocks in Japan recovered from a decline in the morning session to rise marginally on a rebound in tech stocks. Intel second quarter profit increased 25%, sales rose 9.6% and forecasted better than expected sales growth in the current quarter.

However a fall in commodity stocks limited gains as crude oil prices dropped on speculation that slowing global economy will crimp demand.

Market Sentiment

In Tokyo trading Nikkei 225 rose 0.05% or 6.24 at 12,760.80, and the broader Topix Index slumped 0.3% or 3.84 at 1,249.28.

In the first section of the Tokyo Stock Exchange 8.9 billion shares worth 939 billion yen were traded and in the second section 40 million shares valued at 3 billion yen changed hands.

Of the Nikkei 255 stocks 107 rose, 109 declined, and 9 were unchanged. Toho Co Ltd led advancers in the index shares with a rise of 6.60% followed by OKI Electric Industries increasing 4.14%.

Japan Service Demand Declines 0.2%

The Ministry of Industry Trade and Economy reported today on its Website that the Indices of Tertiary Industry Activity plummeted 0.2% in May at 110.4. Economists earlier estimated that demand would rise in the review period.

Industries that mainly contributed to the decline are services falling 2.3%, information and communications slumping 3.5% and real estate dropping 0.7%.

Also industries that contributed to the increase in service demand are wholesale and retail trade gaining 1%, electricity, gas, heat supply and water utilities rising 1.7%, finance and insurance surging 0.6%, eating and drinking places and accommodation jumping 1%, compound services increasing 2.4%, transport soaring 0.3%, and learning support spiking 1.1%.

However, demand for medical, health care and welfare remained unchanged.
FSA Considers Strict Oversight Of Ratings Agencies

The Nikkei News reported today that the Financial Services Agency is mulling plans to monitor and inspect credit rating agencies amid mounting concerns that lax assessments of securitized subprime mortgage products are the prime reason for the current market turmoil.

Gainers & Losers

Toho Co Ltd led advancers in the in the Nikkei 225 index shares with a rise of 6.60% followed by increases in OKI Electric Industries of 4.14%, in Dainippon Sumitomo of 4.11%, in Nippon Meat Pack of 3.77%, and Kawasaki Heavy Industries of 3.76%.

Technology stocks rose after Intel Corp reported yesterday that second quarter profit rose 25% and projected that sales will beat analyst estimates. Advantest Corp gained 1.81% as a result.

Financial stocks also increased as the U.S. regulator moved to limit certain types of short selling in major financial companies. The practice of ‘naked short’ where investors sell stock without securing stocks will be deemed illegal. The regulatory agency under the pressure from Lehman Brothers has acted to weed out short sellers from dragging the battered brokers stock lower.

Mizuho Trust & Banking edged up 1.19% and Resona Holdings surged 1.23%.

Toyota Tsuho led decliners in the Nikkei 225 index shares with a fall of 6.9% followed by losses in Inpex Holdings of 4.84%, in Heiwa Real Estate of 4.53%, in Sojitz Corp. of 4.52%, and Yahoo Japan Corp. of 4.26%.

Inpex and other commodity stocks slid as oil prices fell 4.4% to $138.74 after Federal Reserve Chairman Ben S. Bernanke said in his testimony to Congress yesterday that significant risks to the outlook for global economic growth still remain.

Sumitomo Metal Mining declined 2.78%, Nippon Light Metal shed 4.17% and Toho Zinc plummeted 3.58%.

Toyota to Open Factory in Brazil

AFP reported on its Web site today that Toyota is set to open a second factory in Brazil for an investment between $600 million and $700 million in the next three years to manufacture small cars.

According to Brazil Industry Minister Miguel Jorge the plant will produce 150,000 vehicles a year.