Tokyo Surges 7.7%; Sony, SMFG Net Drops

123jump.com Staff
29 Oct, 2008
New York City

Nikkei 225 index surged 7.7% following a rise of 10% in New York. Japan industrial production fell 1.2% in September. Sony second quarter net income dropped 72% and the company left its full year profit unchanged. Sumitomo Mitsui first half profit fell 50% on bad loans of 220 billion yen.

[R]5:00AM New York, 7:00PMm Tokyo - Japan's industrial production falls 1.2% in September.[/R]

Stocks in Japan rose sharply rebounding to the 8,000 mark driven by an overnight rally on Wall Street on the expectations that the Fed will cut its key rate by a quarter percentage point.

Market Sentiment

In Tokyo trading Nikkei 225 rose 7.7% or 589.98 to 8,221.90, and the broader Topix Index surged 5.9% or 46.29 to 830.32.

In the first section of the Tokyo Stock Exchange 12.2 billion shares worth 909 billion yen were traded and in the second section 156 million shares worth 1.7 billion yen changed hands.

Of the Nikkei 225 index stocks 210 rose, 13 declined, and 2 were unchanged. Konica Minolta led gainers in the index shares with a rise of 19.1% followed by Nissan Chemical Industries rising 19%.

Japan's Industrial Production Fell 1.2% in September

Japan's Ministry of Economy, Trade and Industry reported that the country's industrial production dropped 1.2% in September from the previous month and gained 0.4% from a year ago to 105.8.

Industries that contributed to the increase were general machinery, transport equipment, and electronic parts and devices respectively.

Commodities that drove the increase include metal oxide semiconductor IC (Memory), large trucks, and small passenger cars correspondingly.

METI forecasted that production is expected to decline 2.3% in October dragged by electronic parts and devices, transport equipment and iron and steel in that order, while production is projected to drop 2.2% in November weighed by transport equipment, electrical machinery and iron and steel respectively.

Japan Slashes Economic Assessment in 11 Regions

Japan's ministry of finance today downgraded its assessment in all of the country's 11 regions for the first time in 10 years.

Economic growth is stagnating in many regions and some are showing signs of weaknesses.

Yen Rises

The yen rose 2.7% to 97.26 at the close of trade today from 97.28 against the dollar.

Gainers & Losers

Konica Minolta led advancers in the Nikkei 225 index shares with a rise of 19.1% followed by increases in Nissan Chemical Industries of 19%, in UBE Industries of 18.5%, in OJI Paper Co. of 18.4%, and Honda Motor Co. of 18.4%.

Commodity stocks also increased after crude oil prices gained 3.5% to $64.67 and copper prices rose. Nippon Mining House edged up 15.1% as a result.

Fujitsu Ltd. led decliners in the Nikkei 225 index shares with a fall of 7.7% followed by losses in Nomura Holdings of 5.9%, in Nichirei Corp. of 4.8%, in Mizuho Financial Group of 3.72%, and Shinko Securities of 3.7%.

Earnings Review

Sony Corp reported today that the company's net income in the second quarter ended September 30 dropped 72% to 20.8 billion yen from the comparable period a year ago.

Revenue in the period declined 0.5% to 2.07 trillion yen on a rising yen, a weak global economy and soaring price competition.

Operating profit fell to 11 billion yen in the quarter from 111.6 billion yen.

The consumer electronics maker’s financial services unit was also affected by a decline in the stock market.

The company left its full-year profit forecast at 150 billion yen, while revenue is expected to rise 1.5% to 9 trillion yen.

Japan's third largest bank Sumitomo Mitsui Financial Group said first half profit declined 50% to 85 billion yen from 170 billion a year ago on soaring bad debts after the collapse of Lehman Brothers on September 15.

Bad loans in the period rose to 220 billion yen.

The lenders also slashed its full year profit estimate 180 billion yen from a May forecast of 480 billion yen.

Toshiba Corp reported yesterday a second quarter net loss of 26.9 billion yen from 25 billion yen in the same period a year ago as chip prices dropped on falling demand.

Operating profit in the period fell from 61.3 billion yen from 700 million yen a year earlier.

The company also registered its first interim loss in five years to 38.45 billion from 45.66 billion yen a year ago.

Sales declined 5.3% to 3.5 trillion yen. Full year profit is expected to fall 45.1% from a year ago to 70 billion yen.

Hino Motors reported a second quarter net loss of 3.9 billion yen from a profit of 5.6 billion yen a year ago, while operating profit plunged to 900 million yen from 14.9 billion yen a year earlier.

Profit in the six months ended September fall 76% to 3 billion yen from 12.28 billion yen a year ago.

The company forecasts net income in the full-year through March 2009 will dip 91% to 2 billion yen.