RTTNews - The Japanese market opened on a weak note on Thursday with investors pressing sales almost across the board amid concerns about the economy and some mixed data from the U.S. A stronger yen has triggered a sell-off in export stocks, and bank stocks are also trading weak tracking the overnight fall of financial stocks on Wall Street.
The benchmark index Nikkei, which opened 0.64% down at 9,778, has plunged deeper into the red and is currently trading at 9,669, down 172 points or 1.75% from its previous close. Despite a weak start, the Nikkei had ended 88 points or 0.9% up at 9,841 on Wednesday on bargain hunting and recovery hopes.
Automobile stocks Honda Motor, Suzuki Motor, Toyota Motor and Nissan Motor are down sharply in the red due to a stronger yen.
In the banking space, Resona Holdings, Shizuoka Bank, Chuo Mitsui Trust Holdings, Chiba Bank, Sumitomo Trust and Banking, Mitsubishi UFJ Financial and Mizuho Financial Group are trading sharply lower.
Construction, food, textiles steel, non-ferrous metals, machinery and electric machinery stocks are trading mostly lower with a few of them posting sharp losses. Real estate, insurance, chemicals and pharmaceuticals stocks are exhibiting a mixed trend.
Shares of Kinki Nippon Tourist Co. are struggling for support after the company said it would likely post a 5 billion yen group net loss for the current fiscal year through December. The travel agency is set to post losses for the third straight year, following its 3.7 billion yen loss the previous year. The company projected a 100 million yen profit at the beginning of the year, but the domestic spread of the swine flu dampened tourist traffic. It also plans to book special losses of about 1 billion yen from a legal settlement, among other costs.
Yamaha Corp. is planning to step up efforts to reduce fixed costs in the current fiscal year through March 2010. Although domestic and overseas sales of musical instruments, including pianos, remain sluggish due to the economic downturn and the yen's appreciation, the firm expects active efforts to slash costs will enable it to stay in the black. Last year, Yamaha amortized goodwill of two audio equipment subsidiaries in Europe, which will enable it to lower costs by 1.3 billion yen this year. The Yamaha Corp. stock is trading at 1,158 yen, down nearly 3% from its previous close.
Daiichi Sankyo Co. said Wednesday that it would issue a total of 100 billion yen in unsecured straight bonds, with the proceeds to go toward repaying bank loans used to purchase India's top drug maker, Ranbaxy Laboratories Ltd. This will be Daiichi Sankyo's first bond offering since the former Sankyo Co. and the former Daiichi Pharmaceutical Co. merged in September 2005.
Late last month, the Japanese drug maker filed a shelf registration of up to 300 billion yen in bonds. Daiichi Sankyo says that it could issue more bonds up to that amount later on, depending on market conditions. The Daiichi Sankyo stock is trading modestly higher this morning.
Towa Corp. shares are trading firm, hitting a year-to-date high in the process. The stock is up following a report that the company will enter the auto parts manufacturing equipment business by taking advantage of its mainstay technology for semiconductor production equipment.
In the currency market, the U.S. dollar traded in upper 95-yen territory early Thursday in Tokyo, up slightly from its levels in New York overnight. Currently, the yen is trading at 95.75 to the U.S. dollar.
Among other markets in the Asia-Pacific region, Australia and Singapore are trading lower, while Shanghai, Taiwan, Korea and New Zealand are currently trading in positive territory. Stock markets across the Asia Pacific region had ended Wednesday's trading on a mixed note.
After a choppy ride, amid mixed sentiment with regard to the near-term prospects of the economy and the proposed financial system reforms from the Obama administration, the major indices closed flat on Wall Street on Wednesday. The data on consumer prices showed a modest increase in the month of May, but the rise was less than what the economists had expected.
Unable to hold on to their earlier gains, the Dow slipped 7.49 points to 8,947.18 and the S&P 500 dropped by 1.26 points to 910.71. The Nasdaq, however, ended higher by 11.88 points at 1,808.06.
Major European markets all closed firmly in the red, with the French CAC 40 Index and the German DAX Index falling by 1.6 percent and 1.9 percent, respectively. The U.K.'s FTSE 100 Index also finished notably lower, dropping by 1.2 percent.
Oil prices finished a choppy session modestly higher on Wednesday in U.S. trading as investors mulled the Energy Information Administration inventories report. Oil gained strength in the afternoon as the dollar gave back some early gains. Light sweet crude ended the day at US$71.03, up 56 cents.
For comments and feedback: contact firstname.lastname@example.org