RTTNews - The Japanese market opened lower and plunged deeper into the red as participants dumped stocks with the overnight fall on Wall Street and fresh concerns over the state of the U.S. economy hurting sentiment. A stronger yen too played a role by dragging down exports related stocks.
The benchmark Nikkei, extending its slide to a sixth successive session today, opened more than a percent down at 9,549 and declined sharply to 9,458 with stocks cutting across sectors having a free fall. The index is currently trading at 9,466 down nearly 182 points or 1.9% from its previous close.
On Tuesday, the Nikkei had ended at 9,648, suffering a loss of 33.08 points or 0.34%.
Falling crude oil prices and speculation that the U.S. government may need to work out additional stimulus measures fueled pessimism over the state of the U.S. economy had forced investors to go on a profit-taking spree on Wall Street yesterday.
In Tokyo, automobile stocks Toyota Motor, Hondo Motor, Suzuki Motor, Mazda Motor, Nissan Motor and Hino Motors are trading lower by 2% - 5%.
In the banking space, Sumitomo Mitsui Financial, Mitsubishi UFJ Financial Group, Bank of Yokohama, Shizuoka Bank, Chiba Bank, Resona Holdings, Mizuho Trust & Banking and Mizuho Financial Group are all trading sharply down, losing between 2% - 6% from their previous closing prices.
According to reports, Japan's three megabanking groups are reining in their overseas lending, particularly in Europe and the U.S., amid an increase in non-performing loans owing to the global economic slowdown. The combined overseas loan balance of Mitsubishi UFJ Financial Group Inc., Mizuho Financial Group Inc. and Sumitomo Mitsui Financial Group Inc. totaled 31.8 trillion yen as of March 31, a decline of 2.6 trillion yen, or 8%, from the end of last September.
Non-ferrous metals are down in the red. Shares of SUMCO Corp., Sumitomo Metal Mining, Sumitomo Electric Industries, Fujikura, Mitsubishi Materials, Toyo Seikan Kaisha, Toho Zinc and Mitsui Mining and Smelting Co. are down with sharp losses.
Construction, mining, foods, textiles, chemicals and transport stocks are down sharply in the red. Oil, rubber, ceramics and steel stocks are also mostly trading lower. Pharmaceuticals are exhibiting a mixed trend.
Shares of wholesaler Mitsui & Co have rebounded after a weak start. The stock is up sharply on the back of reports that the company is planning to import large quantities of lithium from Canada. The demand for the rate metal which is used in batteries for electric and hybrid vehicles is expected to surge and the move by Mitsui is likely to help boost its earnings in forthcoming quarters. The stock is currently trading up by over 2%.
In the currency market, the U.S. dollar traded in the upper 94-yen range early Wednesday in Tokyo, down from its levels in New York overnight. The yen is currently trading at 94.55 to the U.S. dollar.
Among other markets in the Asia-Pacific region, Australia, Taiwan and Shanghai are down sharply in the red with their benchmark indices losing over 1%. New Zealand, Singapore and Korea are also trading in the red with notable losses. Markets across the region had ended Tuesday's session on a mixed note.
On Tuesday, stocks declined sharply on Wall Street, with investors taking some profits amid a lack of significant economic data. Traders also preferred to tread a cautious route ahead of the earnings reporting season and the release of employment, international trade and consumer sentiment reports.
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