Tokyo: Japan’s Nikkei stock average slid 2% on Tuesday, 3 June, led down by exporters such as Honda Motor Co Ltd on a stronger yen, with construction firms such as Kajima Corp falling after a brokerage downgrade.
Mitsui OSK Lines and other shipping firms sank as investors moved to lock in profits after several days of sharp gains, though bargain-hunting was expected to emerge.
Banks, which rose sharply on Monday, slid in tandem with their US peers after Standard and Poor’s downgraded debt ratings of three big securities companies, but market players said losses were likely to be limited.
“With bank earnings all out, it’s clear that losses due to the subprime issue were limited. With long-term interest rates likely to rise, prospects for earnings are good,” said Takashi Ushio, head of the investment strategy division at Marusan Securities.
At 0443 GMT the Nikkei was down 1.8% at 14,185.43 and the broader Topix down 1.4% at 1,404.75.
Kajima and fellow builder Taisei Corp fell after Credit Suisse cut its ratings on both builders to “neutral” from “outperform”, following a recent run-up in their share prices.
Kajima slid 5.1% to 396 yen and Taisei was down 4.6% at 288 yen. Shimizu Corp and Obayashi Corp both slid as well, despite their ratings being maintained at “neutral”.
Among the biggest drags on the Nikkei were Honda and Canon Inc as the dollar fell slightly against the yen, fetching 104.41 yen by midafternoon.
Honda fell 4.2% to 3,460 yen and Canon was down 2.6% at 5,640 yen.