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Nikkei down 0.7% as property firms drag

Nikkei down 0.7% as property firms drag
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First Published: Fri, Jul 04 2008. 11 59 AM IST
Updated: Fri, Jul 04 2008. 11 59 AM IST
Tokyo: The Nikkei share average fell 0.7% on Friday, on course to set its longest losing streak in more than half a century, dragged down by property stocks such as Sumitomo Realty and Development on credit fears.
Shares of apartment developer Urban Corp tumbled more than 30%, leading a sharp decline among some midsize property companies on speculation they could be risky investments following a handful of recent bankruptcies in the sector.
“The afternoon’s market fall is due to property shares that are under huge pressure on credit worries. Investors think the real estate sector will have a tough time going forward,” said Hiroaki Kuramochi, general manager of the financial institutions service department at Tokai Tokyo Securities.
As of 0532 GMT, the benchmark Nikkei fell 85.80 points to 13,179.60, heading for its longest losing streak since a 15-day period in 1954.
The broader Topix shed 0.5% to 1,292.22.
Shares of Sumitomo Realty and Development dropped 3.5% to 2,065 yen and Mitsubishi Estate Co Ltd fell 2.1% to 2,355 yen.
Urban tumbled 30.4% to 183 yen.
“I don’t know what kind of information people are basing their sell-off on, but at this point, a lot of people are selling on worries about credit risks,” said Credit Suisse analyst Masahiro Mochizuki, referring to Urban’s shares.
Last month’s bankruptcy of real estate developer Suruga Corp has made investors worried that others in the sector might go bust as they suffer from tight financing, soaring construction material prices and weak apartment sales.
One bright spot was Tokai Carbon Co Ltd The stock jumped 10.7% to 1,125 yen after the firm said it had started negotiating with overseas customers to raise the price of its graphite electrodes, used in electric steel furnaces.
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First Published: Fri, Jul 04 2008. 11 59 AM IST
More Topics: Japan | Nikkei | Topix | Stocks | Sumitomo Realty |