Tokyo Stocks Rally Halts

123jump.com Staff
04 Jun, 2009
New York City

Japan stocks edged lower as investors focused on rising debt and growing costs of debt servicing in the U.S. and UK. The prospect of global recovery do not look as sound as they appeared only ten weeks ago. The latest global rally in stocks has stretched valuations.

[R]7:00 PM Tokyo, 8:00 AM New York – Japan stocks edged lower as investors focused on rising debt and growing costs of debt servicing in the U.S. and UK. The prospect of global recovery do not look as sound as they appeared only ten weeks ago. The latest global rally in stocks has stretched valuations that many investors find unsustainable.[/R]

Investors in Tokyo sounded a cautious note and worried that recent gains in the market may not be supported by the improved fundamentals in the world economy. Investors in Asia are increasingly focused on the rising level of government debts in the U.S. and UK.

The Nikkei 225 Index in Tokyo closed lower 72.71 or 0.75% to 9,668.96.

Ministry of Finance reported in its quarterly survey of Japanese corporation that operating profits across industries declined 80% and ordinary profits fell 28% in the three months ending in March. Sales across all industries declined 9.9%.

Gainers & Losers

Automakers dropped after inching higher in yesterday’s trading. Toyota Motor fell 0.5% to 3,810 yen after the U.S. sales in May plunged 41%.

Honda declined 1.2% to 2,840 yen and its May sales in the U.S. dropped 42% to 98,300 units. Honda raised 70 billion yen in a bond offering for the first time in sixteen years.

Mitsubishi Motors Corp surged 12% to 171 yen after local newspaper the Asahi reported that automaker will sell electric vehicles in Japan in less than four years.

Shipping lines led the decliners in Tokyo trading. Kawasaki Kisen edged 3.5% lower to 440 yen and Nippon Yusen KK dropped 4.5% to 444 yen.

Exporters and electronics makers declined as well. Panasonic Corp edged lower 1.5% to 1,355 yen and Cannon Inc decreased 1.3% to 3,120 yen.

Sony Corp declined 0.6% to 2,640 and Nintendo declined 1.7% to 25,360 yen. The game console makers are bracing for tough year as consumer spending falls. In the current year, Sony is expected to sell between 12.5 million and 13.5 million consoles compared to 25.5 million by Nintendo.

Banks and brokerages closed higher. Nomura Holdings added 3.2% to 762 yen, Mitsubishi UFJ Financial Group increased 2% to 626 yen and

Nikkei 200 Average Movers

Nippon Yusen Kabushiki Kaisha led the decliners in the Nikkei 225 index of 4.5% followed by losses in Fuji Electric Holdings Co Ltd. of 4.2%, in Konica Minolta Holdings Inc of 4.2%, in Mitsubishi Chemical Holdings Corp of 3.8% and in Daikin Industries Ltd of 3.7%.

Mitsubishi Motors Corp. led gainers in the Nikkei 225 index with a rise of 15.0% followed by gains in Meidensha Corp. of 12.6%, in T&D Holdings, Inc of 5.9% and GS Yuasa Corp of 4.4%.

Asian Markets Review

The Nikkei 225 Index in Tokyo closed lower 72.71 or 0.75% to 9,668.96, Hang Seng index in Hong Kong decreased 73.70 or 0.40% closed to 18,502.77, CSI 300 index in China higher 14.36 or 0.49% closed to 2,953.75. ASX 200 index in Australia decreased 82.60 or 2.06% closed to 3,934.60. The KL Composite index in Malaysia higher 8.57 or 0.81% closed to 1,063.97.

The Kospi Index in South Korea decreased 36.75 or 2.60% to close at 1,378.14. SET index in Thailand closed higher 11.35 or 1.95% to 593.60 and JSE Index in Indonesia increased 21.80 or 1.08% closed to 2,032.72. The Sensex index in India increased 137.78 or 0.93% closed to 15,008.68.