RTTNews - The stock market in Japan slumped more than 3% on Monday as fresh concerns emerged about recovery in the US, the largest trading partner, after consumer sentiment index in the U.S unexpectedly declined and the economic data released earlier raised concerns that the average consumer in the U.S is still struggling. Positive news from the Cabinet Office confirming that the country emerged out of recession technically with a 0.9% GDP growth in the second quarter failed to enthuse the investors.

The benchmark Nikkei 225 Index slumped 328.72 points, or 3.10% to close at 10,269, while the broader Topix index of all first section stocks was down 23.98 points, or 2.46%, to 950.

On the economic front, a preliminary report released by the Cabinet Office revealed that the economy expanded by 0.9 percent in the second quarter of 2009, roughly in line with analyst expectations for a 1.0% increase following a revised 3.1% contraction in the first quarter. The report further noted that on an annualized basis, GDP was up 3.7% - roughly in line with forecasts for a 3.9% gain following the 14.2% contraction in the previous three months. Nominal GDP was down 0.2% on quarter and 0.7% annualized.

Light sweet crude oil price for September delivery ended at $66.59 a barrel in electronic trading, down $0.92 from its previous close $67.51 a barrel in New York on Friday.

Exporters, automakers, trading companies and banks declined on concerns about economic recovery. The strengthening of the local currency against the US dollar also weighed on market sentiment.

Trading companies declined following sharp drop in commodity prices in the international market on Friday. Mitsubishi Corp., declined 3.61%, Sumitomo Corp. lost 3.33%, Mitsui & Co. fell 4.17% and Toyota Tsusho Corp. 3.83%. Sony Corp., which makes Vaio brand computers, declined 4.05%.

Automakers also ended weaker. Toyota Motor Corp., shed 2.67%, Honda Motor lost 3.85%, Nissan Motor fell 3.43% and Mazda Motor slumped 5.01%.

Realty stocks also ended weaker following news that investment in housing declined 9.5% during the second quarter. Sumitomo Realty and Investment slumped 5.84%, Mitsui Fudosan fell 4.57% and Mitsubishi Estate lost 4.26%.

Among precision equipments, Konica Minolta Holdings lost 3.17%, Citizen Holdings fell 3.97% and Ricoh Co., declined 3.87%.

In banking space, Mitsubishi UFJ Financial lost 2.64%, Mizuho Financial Group fell 3.39%, Resona Holdings shed 1.35% and Sumitomo Mitsui Financial declined 3.61%.

In the U.S., stocks ended sharply lower on Friday following weak economic data related to consumer sentiment index which dent hopes of a sustainable recovery after a report released earlier in the week revealed that the average consumer in the world's largest economy is still struggling. Late-buying at lower levels, however, helped offset some of the losses.

The Dow closed down by 76.79 points or 0.8% at 9,321, the Nasdaq fell by 23.83 points or 1.2% to 1986 and the S&P 500 slipped by 8.64 points or 0.9% to 1004.

For comments and feedback: contact editorial@rttnews.com