Early Strength in Tokyo; Mitsui OSK Weak

123jump.com Staff
28 Sep, 2009
New York City

Stocks in Japan are expected to open higher after a rally in New York and Europe on mergers worth $13 billion. Exporter, auto and shipping companies fell on strong yen. Mitsui O.S.K estimated sharply higher loss for the first six months.

[R]8:00 AM New York – Stocks in Japan are expected to open higher after a rally in New York and Europe on mergers worth $13 billion. Exporter, auto and shipping companies fell on strong yen. Mitsui O.S.K estimated sharply higher loss for the first six months.[/R]

Stocks in Japan and Asia are expected to open higher after slew of merger deals totaling more than $13 billion were announced in the U.S. Financials are expected to lead the gainers at the opening.

Investors are showing higher risk appetite and corporations are willing spend cash to acquire companies.

Xerox agreed to pay $6.4 billion for government services outsourcing company Affiliated Computer Services as it seeks growth in government contract outsourcing.

Abbott agreed to pay €4.5 billion or $6.6 billion in cash for pharmaceutical business of Belgium based Solvay SA.

China based Sinochem also entered into an agreement to explore a merger with Australia based Nufarm.

Nikkei 200 Average Movers

In Monday’s trading stocks declined in Tokyo. Of the stocks in Nikkei 225 Average, 28 increased, 192 decreased and 5 were unchanged.

Of the 225 stocks in the index, 44 fell more than 5%.

Showa Denko KK led the decliners in the Nikkei 225 index of 10.6% followed by losses in Clarion Co Ltd of 10.1%, in Toho Zinc Co Ltd of 8.8%, in Pioneer Corp of 8.7% and in Hitachi Construction Machinery Co Ltd of 7.5%.

Chiba Bank Ltd led gainers in the Nikkei 225 index with a rise of 2.8% followed by gains in Fast Retailing Co Ltd of 2.6%, in Nippon Meat Packers Inc of 2.2% and in Nippon Telegraph & Telephone Corp of 2.1%.

Other Movers

Stocks in the broader market declined as the yen climbed to the highest since February. Automakers, shipping companies and electronics exporters fell in the trading weakness.

The yen closed at 88.24 against one dollar.

Komatsu Ltd declined 4.4% to 1,669 yen and the company reported the largest single order of 20 billion yen from Indonesia based coal miner. The company president Kazuhiko Iwata in an interview confirmed the order and said that the order is the largest since the last order of 18 billion yen for a miner based in Chile.

Honda declined 5% to 2,675 yen, Toyota Motor decreased 3.8% to 3,570 yen and Hitachi Construction Machinery Co fell 7.6%. Nissan fell 5% to 580 yen.

Sanyo Electric declined 6.5% to 218 yen and Nikon Corp fell 5.6% to 1,589 yen.

Shipping companies fell after Mitsui O.S.K. said on Friday that its operating loss for the first half is expected to be three times larger than its previous estimate. Mitsui fell 5.4% to 521 yen, Kawasaki Kisen Kaisha Ltd dropped 7.3% to 343 yen and Nippon Yusen decreased 3% to 343 yen.

Asian Markets Review

The Nikkei 225 Index in Tokyo closed lower 256.46 or 2.50% to 10,009.52, Hang Seng index in Hong Kong decreased 435.99 or 2.07% to 20,588.41 and CSI 300 index in China lower 85.88 or 2.81% to 2,972.64. ASX 200 index in Australia decreased 35.90 or 0.76% to 4,677.40. The FTSE Bursa KL Composite index in Malaysia closed lower 11.44 or 0.94% to 1,205.95.

The Kospi Index in South Korea decreased 15.93 or 0.94% to close at 1,675.55. SET index in Thailand closed lower 12.69 or 1.76% to 708.88 and JSE Index in Indonesia decreased 46.76 or 1.91% to 2,397.83. The Indian market was closed today.