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Nikkei trims gains on Iran missile test

Nikkei trims gains on Iran missile test
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First Published: Wed, Jul 09 2008. 02 16 PM IST
Updated: Wed, Jul 09 2008. 02 16 PM IST
By Taiga Uranaka / Reuters
Tokyo: The Nikkei stock average pared much of its earlier gains to end up 0.2% on 9 July after a report that Iran had test-fired missiles, raising fears about a jump in oil prices on heightened tensions in the region.
The Japanese stock market sharply rose in the morning, led by financial shares such as Mitsubishi UFJ Financial Group after comments from the US Federal Reserve helped ease credit worries.
But the missile test news, which came in the afternoon, prompted many investors to lock in profits, with the Nikkei hovering near the previous day’s close in the last half hour of trading.
“The dollar had been strong and oil prices had been falling, but the missile firing will rekindle inflationary concerns,” said Fumiyuki Nakanishi, group manager of the investment information department at SMBC Friend Securities.
The benchmark Nikkei ended up 19.03 points at 13,052.13, after rising as much as to 13,284.65. The broader Topix was up 0.2% at 1,285.53.
Some market participants said the market reaction to the news shows investors had remained skittish even when the market was making a sharp rebound.
Komatsu Ltd and other machinery stocks powered higher in the morning after Japan’s May core machinery orders largely beat economists’ consensus.
Banks firm
Mitsubishi UFJ Financial Group, Japan’s biggest bank, rose 2.3% to 955 yen, while No.2 Mizuho Financial Group jumped 3.9% to 512,000 yen and Sumitomo Mitsui Financial Group the third-biggest bank, gained 3.2% to 796,000 yen.
Fed Chairman Ben Bernanke said in a speech the US central bank may extend emergency lending facilities for big Wall Street banks past the year-end, showing the Fed is determined to stop the housing-inspired credit crisis from wreaking further havoc on the economy.
Aeon Co Ltd fell 5.1% to 1,171 yen, becoming the biggest percentage loser on the Nikkei, after Japan’s second-largest retailer posted a 20% decline in first quarter operating profit, hurt by weak clothing sales.
“The extent of the first quarter decline exceeded our estimates, particularly in regard to poor general merchandising store apparel sales and speciality store profit declines,” Goldman Sachs analyst Sho Kawano wrote in a client note.
Trade was moderate on the Tokyo exchange’s first section, with 1.97 billion shares changing hands, in line with last week’s daily average. Advancing stocks and declining ones were almost even at 793 to 781.
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First Published: Wed, Jul 09 2008. 02 16 PM IST
More Topics: Markets | Japan | Stocks | Nikkei | Topix |