RTTNews - Tracking the overnight fall on Wall Street, the Japanese stock market opened weak on Tuesday and plunged deeper into the red subsequently with stocks across the board declining on fairly heavy selling. A worse-than-expected contraction in the U.S. factory sector sent stock prices crashing down on Wall Street on Monday and raised fresh concerns about the state of global economy.
The benchmark Nikkei 225 Index, which opened 1.25% down at 9,914.40, ended the morning session at 9,843.67, down 196 points or 1.95% from its previous close.
Automobile stocks Honda Motor, Toyota Motor, Suzuki Motor and Nissan Motor are all down in the red with sharp losses. Mazda Motor, Hino Motors and Isuzu Motors are trading sharply lower.
Almost all banking and retail majors were down in the red. Stocks from insurance, real estate, communications and services sectors also exhibited weakness. And there were not many gainers from construction, chemicals, foods, pharma, steel, non-ferrous and machinery sectors either.
Electric power stocks Tokyo Electric Power, Chubu Electric Power and Kansai Electric Power bucked the trend and were trading firm with sharp gains.
Sumitomo Mitsui Financial Group Inc. has announced a price of 3,928 yen a share for its stock offering, which could be worth more than 920 billion yen in all after follow-up sales. Net proceeds from the fundraising will total 885 billion yen. The stock was down by nearly a percent at 3,990 at the break.
The banking group's capital adequacy ratio is expected to rise 1.68 percentage points to about 13%, with the Tier 1 ratio climbing by the same amount to just under 10%. The subscription period is set for Tuesday to Wednesday and the payment date for June 22. The group will issue up to 235 million shares, increasing the outstanding stock by nearly 30%. SMFG says domestic demand exceeded the number of shares to be offered by about 50%, while foreign demand surpassed the mark by around 150%.
Shares of semiconductor-manufacturing equipment seller Techno Alpha Co. Ltd. are trading sharply lower this morning following the company lowering its net profit forecast for the year ending November 30, 2009. The company sees sales plunging 52% to 1.5 billion yen instead of the previously forecast 3.2 billion yen. The company now expects its net profit to fall by 79% to 47 million yen, undershooting its previous estimate by 153 million yen. The stock is down by over 9% despite trading well off its earlier low.
A sharp decline in sales in May triggered a sell-off at the Takashimaya counter today. The department store operator reported a 12.9% fall in its sales for the month of May. Amid concerns the company may be unable to meet its annual sales target, traders appear to be booking profits in the stock. Currently, the stock is trading lower by 2.6%.
The U.S. dollar traded at the upper 97 yen-level early Tuesday in Tokyo, down slightly from its levels in New York overnight. Currently, the yen is trading at 96.91 to the U.S. dollar.
Other stock markets across the Asia-Pacific region are also trading weak today. The key indices of the Australian, Hong Kong and Singapore markets are currently down by 1%-1.3%. The New Zealand market's NZX 50 index is down by 0.8%. The Korean index KOSPI is down by 0.5% and the Shanghai's benchmark is trading lower by 0.33%.
Stock prices fell sharply on Wall Street on Monday with traders going on a profit-taking spree. A report from the New York Federal Reserve that showed conditions for New York manufacturers have deteriorated at a faster pace in the month of June than in the previous month did play a key role in prompting investors to go for the sell button.
The Dow closed down 187.12 points or 2.1 percent at 8,612.13, the Nasdaq closed down 42.42 points or 2.3 percent at 1,816.38 and the S&P 500 closed down 22.49 points or 2.4 percent at 923.72.
Stock markets across the Asia-Pacific region closed mostly lower on Monday, as traders cashed in on recent gains. Japan's benchmark Nikkei 225 Index fell nearly 1 percent after trending higher in recent weeks.
Major European markets also saw considerable weakness, with the U.K.'s FTSE 100 Index ending the session down 2.6 percent, while the French CAC 40 Index and the German DAX Index fell 3.2 percent and 3.5 percent, respectively.
With data on U.S. housing starts, inflation and industrial production to come out today, the mood across the globe is likely to remain cautious.
Crude oil dropped on Monday on profit taking and a stronger dollar. Light sweet crude oil fell to $70.62, down $1.42 for the session. Earlier, oil hit as low as $69.58.
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