Tokyo Stocks Rise, Nikkei Sees Worst Annual Loss

123jump.com Staff
30 Dec, 2008
New York City

Moderate gains from Tokyo stocks at market close on Tuesday proved to be only mild relief as Nikkei witnessed its greatest annual loss ever. Barclays Capital expressed concerns that the local economy may suffer its worst quarterly decline since 1974.

[R]5:00AM New York, 7:00PM Tokyo- Nikkei in worst annual fall ever. Japan’s economy projected to declined 12.1% in December quarter.[/R]

Stocks in Japan rose in the last trading session of this year despite reports that the country’s economy might probably decline in the three months to December.

However, the exchange registered its greatest annual loss since its establishment in 1949.

Nikkei only traded in the morning session and will resume trading on January 5.

Market Sentiment

In Tokyo the Nikkei 225 stock average rose 1.3% or 112.39 to 8,859.56, falling 42% for the year, while the broader Topix Index edged up 0.5% or 4.47 to 859.24.

In the first section of the Tokyo Stock Exchange 8.5 billion shares worth 566 billion yen were traded and in the second section 174 million shares valued at 1.3 billion yen changed hands.

Of the Nikkei 225 stocks 160 rose, 50 declined, and 15 were unchanged, Nippon Soda Co. led gainers in the index shares with a rise of 12% followed by Nippon Light Metals increasing 9.8%.

Japan’s Economy Forecast to Contract 12.1% in December Quarter

Barclays Capital was reported earlier today to have said Japan’s economy is projected to contract by 12.1% in the three months to December.

This is expected to be the most significant decline since the first quarter of 1974 when the economy shrank by 13.1%.

News that industrial production tumbled 8.1% in November from a month earlier - dropping the most in 55 years - and a record 26.7% drop for exports in the same period caused the review of the gross domestic product figures.

Chief Japan economist at Barclays in Tokyo Kyohei Morita said the fiscal policy that could influence Japan’s economy will be that of the U.S. and China since the country’s Prime Minister Taro Aso is presently struggling to show his political leadership.

“Given the speed and the length of the contraction, this recession could be the most severe in the postwar era. We expect negative growth will continue for a fifth straight quarter to the April-June period of 2009,” commented Morita.

Japan’s FDI Falls 36% in Seven Months to October

Nikkei News reported today that the country’s foreign direct investment inflows will drop 36% for the first seven months of the year through October on worsening conditions on the global financial market.

Gainers & Losers

Nippon Soda Co. led advancers in the Nikkei 225 index shares with a rise of 12% followed by increases in Nippon Light Metal of 9.8%, in NEC Corp. of 9.2%, in Nitto Boseki Co. of 8.6%, and Pioneer Corp. of 7.2%.

Commodity stocks advanced as oil prices jumped $2.31 to $40 per barrel and gold prices climbed $4.10 to $875.3 per barrel. Inpex soared 5.1%.

Tokio Marine HD led decliners in the Nikkei 225 index shares with a decline of 4.4%, in Meidensha Corp. of 3.8%, in Mitsui Sumitomo of 3.5%, in Shiseido Co. Ltd. of 2.9%, and Toyota Motor Corp. of 2.7%.

Realty stocks dropped. Sumitomo Realty dropped 2% and Mitsubishi Estate tumbled 1.7%.