Nikkei falls 1.92% on U.S. economic fears

20:31, June 25, 2010      

Email | Print | Subscribe | Comments | Forum 

Tokyo stocks extended losses Friday as mounting fears about the health of the U.S. economy and prospects for corporate earnings, coupled with a strengthening yen, sent investors fleeing from risky assets, sending the Nikkei average to a two-week closing low.

The 225-issue Nikkei Stock Average fell 190.86 points, or 1.92 percent, from Thursday to 9,737.48, the lowest closing level since June 11 and the broader Topix index of all First Section issues on the Tokyo Stock Exchange lost 12.47 points, or 1.42 percent, to close the week at 867.30.

Brokers pointed to concerns shifting from debt woes in the euro zone to reemerging concerns in the world's largest economy as Wall Street retreated overnight following worse-than-expected retailer earnings results, which sparked fears that a decline in consumer spending will darken the outlook for corporate earnings.

"The market seems to be gradually shifting its eyes from the debt problem in Greece and its impact on the financial system in Europe to the state of the U.S. economy," said Masatoshi Sato, senior strategist at Mizuho Investors Securities Co.

One local broker added that: "Investors had been aware that the speed of a recovery in the economy is rather slow but believed earnings are on a solid footing, but concerns are now emerging about the outlook for corporate earnings."

Market players, in addition, said Friday that all eyes were on the Group of Eight and Group of 20 summits in Canada this weekend, at which the leaders will discuss global economic vehicles to jump start the sluggish recovery in light of Europe's moves towards increased austerity plans and the U.S. dithering over the continuation of state stimulus measures.

With the U.S. dollar falling below the 89.50 yen mark, technology and export-related issues came under intense selling pressure encouraged by brokerage downgrades to some big-name blue- chips.

Tokyo Electron Ltd., the world's second-largest maker of semiconductor equipment, plunged 5.6 percent to 5,220 yen, the sharpest decline since Oct. 28, after Credit Suisse Group and Mizuho Securities Co. both lowered their equity ratings on the company to "neutral" from "outperform."

Memory chip-related firms were dealt similar blows, with Elpida Memory Inc. tumbling 8.4 percent to 1,401 yen and Dainippon Screen Manufacturing Co. Ltd. diving 8.7 percent to 432 yen, after Mizuho Securities cut both companies' ratings to "underperform."

Shares of Canon Inc. dropped 4.5 percent to 3,530 yen, following Credit Suisse cutting its rating on the stock to "underperform" from "neutral."

Financial issues performed well in early trade, but fortunes were later reversed following reports that the Basel Committee on Banking Supervision plans to soften new capital mandates for banks to protect against future financial collapse.

Subsequently, Mitsubishi UFJ Financial Group Inc. shed 0.5 percent to 419 yen and Sumitomo Mitsui Financial Group Inc. retreated 0.7 percent to 2,658 yen.

Mizuho Financial Group Inc., meanwhile, lost 1.3 percent to 153 yen, following a report in the Nikkei business daily that the firm has decided to raise up to 800 billion yen (8.93 billion U.S. dollars) via a common stock offering by the end of July.

Although the registration was made by Mizuho last month, no official decision had been announced.

On Friday some 1.88 billion shares changed hands on the Tokyo exchange's First section, up from Thursday's volume of 1.51 billion, with declining issues outnumbering advancing ones by 1, 243 to 322.

Source: Xinhua

(Editor:赵晨雁)

  • Do you have anything to say?

双语词典
dictionary

  
Special Coverage
  • Premier Wen Jiabao visits Hungary, Britain, Germany
  • From drought to floods
Major headlines
Editor's Pick
  • A man visits "Thy Word Is Truth, the Bible Ministry Exhibition of the Protestant Church in China", during its opening at Mount Vernon Place United Methodist Church in Washington DC, capital of the United States, Sept. 28, 2011. Through the Bible's various Chinese versions, ancient or modern, as well as pictures, paintings, calligraphy, art works and historical documents, the exhibition was expected to give an overall understanding of how Bible was brought into China, how it was translated, published, distributed and loved. (Xinhua/Zhang Jun)
  • A visitor passes by in the exhibition of Istanbul design week on Sept. 28, 2011 in Istanbul, Turkey. Istanbul design week will be hosting designers and design exhibitions from around the world in Istanbul from Sept 28 to Oct 2 with the participation of 25 countries. (Xinhua/Ma yan)
  • Red flag flies at the Jiuquan Satellite Launch Center in northwest China's Gansu Province, Sept. 28, 2011. A spokesperson with China's manned space program said Wednesday that fuel has been injected into the Long March-2FT1 carrier rocket in preparation for launching the Tiangong-1 space module Thursday evening as planned. (Xinhua/Wang Jianmin)
  • A militant loyal to the Libyan National Transitional Council (NTC) waves in a tank near Bani Walid, one of the pro-Muammar Gaddafi strongholds, on Sept. 28, 2011. (Xinhua/Hamza Turkia)
  • Jewish worshippers pray at the Western Wall, Judaism's holiest prayer site, in Jerusalem's Old City on Sept. 28, 2011, ahead of Rosh Hashanah, the two-day Jewish new year which will begin at sunset on Sept. 28 and conclude at nightfall on Sept. 30. (Xinhua/Muammar Awad)
  • High school student Johanna Choapa is helped by her father after announcing the end of hunger strike in Santiago, capital of Chile, on Sept. 28, 2011. The end of the strike took place to make way for a dialogue with the government, seeking to resolve the four-month crisis in the education sector. (Xinhua/Jorge Villegas)
Hot Forum Discussion