RTTNews - The stock market in Japan declined more than 2% Monday, mirroring losses on Wall Street on renewed concerns about the outlook for the global economy. The prospect of lower corporate earnings due to recession also weighed on the stocks after Panasonic forecast a loss for the second consecutive quarter. The strengthening local currency also impacted the market, dragging down the exporters.
In the U.S., the Labor Department on Friday said its consumer price index was unchanged in April after edging down by 0.1% in March. The lack of growth in consumer prices came in line with the expectations of economists. The report also showed that the core consumer price index, which excludes food and energy prices, rose 0.3% in April after rising 0.2% in each of the three previous months. Economists had expected core prices to edge up 0.1%.
A report from the Federal Reserve showed a slightly smaller than expected 0.5% decrease in industrial production in April, while the Reuters/University of Michigan Consumer Sentiment index rose to 67.9 in May from 65.1 in the previous month.
The Dow closed down 62.68 points or 0.8% at 8,269, the Nasdaq closed down 9.07 points or 0.5% at 1,680 and the S&P 500 closed down 10.19 points or 1.1% at 883.
In Asian trading, crude oil ended higher by $0.60 at $56.94 a barrel in electronic trading. On Friday, Light sweet crude for May delivery ended at $56.34 a barrel on Friday.
In Tokyo, the benchmark Nikkei 225 Index declined 2.40% or 226.30 points to 9,039 and the broader Topix Index of all First Section Issues lost 21.94 points or 2.50% to 860.
On the economic front, a report from the Cabinet Office showed that Japanese consumer confidence rose to 33.2 in April from 29.6 in the previous month. Economists had expected the index to rise to 31.
Exporters declined amid concerns about the European economy, which shrank at a faster pace, and the local currency strengthened against the U.S dollar. Canon dropped 4.83%, Sony lost 5.84% and Sharp fell 4.65%. Panasonic declined more than 7.50% after the company forecast a loss for the second straight quarter.
In the banking sector, Mitsubishi UFJ, Japan's biggest bank, declined 3.43%, Mizuho Financial fell 3.80%, Sumitomo Mitsui lost 4.08% and Resona Holdings slipped 3.45%. Brokerage Nomura Holdings lost 5.01%.
Among automakers, Toyota Motor lost 0.84%, Honda Motor slipped 0.73%, and Isuzu Motors declined 4.73%
In the oil sector, Inpex eased 3.87%, Nippon Oil slipped 0.54% and Showa Shell fell 1.59%. Among trading houses, Mitsubishi Corp. ended down 3.36%, Itochu slipped 2.53%, and Sumitomo Corp. declined 2.22%.
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