Japan’s Nikkei stock index drops to 26-yr low

Japan’s Nikkei stock index drops to 26-yr low
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First Published: Mon, Mar 09 2009. 11 46 AM IST
Updated: Mon, Mar 09 2009. 11 46 AM IST
Tokyo: Japan’s Nikkei stock index closed at the lowest level in more than 26 years on Monday, falling 1.21% after another batch of gloomy reports on the Japanese economy.
The Nikkei-225 index slipped 87.07 points to 7,086.03, the lowest closing level since October 1982.
Nikkei had booked a four-month closing low the previous trading day, hurt by automakers such as Honda Motor amid worries about the fate of General Motors.
Shares of Takeda Pharmaceutical Co, Japan’s largest drugmaker, were hit by a glut of sell orders, after the US Food and Drug Administration asked for more data to complete a review of a key diabetes drug candidate. Indicated prices showed it down by its daily limit.
But higher oil prices helped buoy energy-linked shares such as oil and gas field developer Inpex.
“Worries about the financial system haven’t gone away. Some hedge funds seem to have been shifting money to assets such as gold from equities,” said Hiroaki Kuramochi, chief equity marketing officer at Tokai Tokyo Securities.
Investors were keen to see the outcome of a meeting between the US auto task force, GM, Chrysler and officials from the United Auto Workers in Detroit this week after auditors raised doubts about GM’s ability to survive outside bankruptcy.
“It’s hard to pick up automakers as nobody really knows what is going to happen with GM and as nothing concrete had been unveiled,” Kuramochi said.
The benchmark Nikkei shed 57.91 points in light trade to 7,115.19, after opening higher. If it closes the day below 7,162.90 hit on 27 October, it would book its lowest finish in about 26 years.
The broader Topix slipped 1.4 percent to 711.17.
The Dow Jones industrial average rose 0.5% on Friday, even after a government report showing the US unemployment rate rose last month to 8.1 percent, its highest since December 1983, as 651,000 jobs were cut.
Automakers fall
Automakers fell as Honda Motor shed 3.3% to 2,080 yen and Toyota Motor Corp slid 2.4% to ¥2,830.
Other exporters also declined on the gloomy US jobs data. Canon Inc slipped 1.4% to 2,160 yen.
Takeda shares were awash with sell orders at 3,320 yen, down 13.1% from Friday’s close.
Worries about the fragile health of the US financial sector and that some banks may be nationalised, weighed on Japanese banks.
Mitsubishi UFJ Financial Group, the top lender, lost 3.5% to ¥387 and No.2 Mizuho Financial Group retreated 2.8% to ¥171.
Shares of Shinsei Bank, a struggling midsize Japanese lender, tumbled 7.5% to ¥74 after the bank said on Friday it would issue an unspecified amount of preferred securities to shore up its capital base.
Among gainers, Inpex climbed 3.7% to 643,000 yen after oil rose over 2% to near $47 a barrel on Monday, extending the previous session’s gains of over 4% amid optimism that Opec would cut output again at this month’s meeting.
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First Published: Mon, Mar 09 2009. 11 46 AM IST
More Topics: Markets | Japan | Stocks | Nikkei | Automakers |