RTTNews - Encouraged by a weaker yen and some better-than-expected earnings reports, especially from auto giants Honda Motor Co. and Nissan Motor Co., the Japanese market opened on a firm note on Thursday. However, with investors turning cautious ahead of the release of more earnings reports, the market drifted down into the red subsequently.
The benchmark index Nikkei, which fell to around 10,070 after opening nearly 43 points or 0.42% up at 10,156 and edging up further, is currently trading at 10,105, down 8.1 points or 0.08% from its previous close. The Nikkei had ended with a modest 0.3% gain on Wednesday.
According to a release from the Ministry of Economy, Trade and Industry, Japan's industrial output rose 2.4% from May to a seasonally adjusted 81 in June, the fourth straight month of increase. The figure, however, fell short of the average market prediction of a 2.5% rise.
The shipment index climbed 3.5% to 81.7 and the inventory gauge fell 1.0% to 95.4, sending the inventory to shipment index down 9.8% to 129.1.Looking ahead, the government forecast that the headline index would rise 1.6% in July, and 3.3% in August.
Shares of Honda Motor Co. and Nissan Motor Co. are up sharply this morning. While Honda, Japan's second biggest car maker by sales volume, said its net profit for the first quarter ended June 30 tumbled 96% on year to Y7.56 billion from Y173.4 billion, Nissan reported a net loss of Y16.53 billion in the three months ended June, reversing from a net profit of Y52.80 billion a year earlier.
However, drastic cost-cutting measures helped the two automakers to achieve remarkable turnarounds and report operating profits. With the results turning out to be better that what analysts had forecast and amid hopes the worst might be over for the two auto giants, investors are seen rushing to pick up their stocks today. The two stocks are currently trading higher by over 6%.
Nomura Holdings Inc. shares rose after a two-day retreat, inspired by the firm's Wednesday evening announcement that it posted a group net profit of 11.4 billion yen in the April-June period, the first positive figure in six quarters. However, after gaining over 3% in early trading, the stock has drifted lower and is currently up by just a modest margin.
Chemicals and pharmaceuticals stocks are trading mixed. Construction and realty stocks are trading weak.
Among bank stocks, Sumitomo Mitsui, Chiba Bank, Mitsubishi UFJ, Mizuho Financial and Mizuho Trust & Banking are trading in positive territory.
In the currency market, the dollar traded in the lower 95-yen zone early Thursday in Tokyo, up slightly from its levels overnight in New York. In early trading, the dollar fetched 95.08-13 yen versus Wednesday's closing quotes of 94.96-95.06 yen in New York and 94.41-43 yen in Tokyo. The yen is currently trading at 95.04 to the U.S. dollar.
Among other markets in the Asia-Pacific region, Australia, Singapore and Shanghai are trading in positive territory with modest gains. New Zealand, Korea and Taiwan are trading weak. Stock markets across the region had finished largely on the downside on Wednesday.
On Wall Street, stocks bounced around in negative territory throughout Wednesday's session in reaction to the day's slew of earnings and economic reports. On the economic front, the Commerce Department released a report showing that orders for transportation equipment declined sharply in June, contributing to a substantial decline in orders for manufactured durable goods.
Notwithstanding a late attempt at rebounding into positive territory, the Dow ended down 26 points or 0.3% at 9,071 and the Nasdaq closed lower by 7.75 points or 0.4% at 1,968. The S&P 500 declined by 4.47 points or 0.5% to 975.
Major European markets closed notably higher, with the German DAX index and the French CAC 40 index finishing up by 1.9% and 1%, respectively, while the U.K.'s FTSE 100 index edged up by 0.4%.
Crude oil dropped sharply on Wednesday after Energy Information Administration data revealed a sharp rise in weekly inventories. Oil closed at a 12-day low after reaching a three-week high earlier in the week.
Light sweet crude for September delivery dropped to US$62.85 per barrel on the New York Mercantile Exchange on Wednesday, down US$4.38 on the session. Prices dipped as low as US$62.70 earlier in the session after coming within a penny of US$69 on Tuesday.
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