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Nikkei slips 1.2% as financials weigh

Nikkei slips 1.2% as financials weigh
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First Published: Tue, Jun 10 2008. 10 59 AM IST
Updated: Tue, Jun 10 2008. 10 59 AM IST
Tokyo: Japan’s Nikkei stock average lost steam and fell 1.2% on Tuesday as worries about financial shares outweighed the positive impact on exporters of a dollar that touched a three-month high against the yen.
Bank shares, including top lender Mitsubishi UFJ Financial Group, initially positive, slipped after US financials were dragged down by Lehman Brothers, which forecast a $2.8 billion second-quarter loss and unveiled a plan to raise $6 billion to strengthen its capital. The benchmark Nikkei average shed 172.01 points to 14,009.37, while the broader Topix fell 0.9% to 1,384.64.
Both had initially climbed, boosted by exporters and buying across the board after over a 2% fall the previous day.
“What triggered a further fall in the market is lower Asian markets and US futures,” said Yoshinori Nagano, chief strategist at Daiwa Asset Management. “Also, Japanese stocks didn’t fall enough yesterday after Friday’s US stock sell-off.”
The negative sentiment helped highlight worries about financial shares, he added.
Asia-Pacific shares outside of Japan dropped 2.4% to a two-month low, an MSCI index showed, while the Shanghai composite index sank 5.7% after China’s central bank tightened bank reserve requirements by one percentage point.
Although investors are largely bullish on the Japanese economy in terms of inflation, compared to the rest of the world, the impact on the stock market remains unclear, said Nagano at Daiwa Asset.
“Even though Japan appears to be better positioned (compared with other countries), that wouldn’t mean much if global stock markets start falling,” he said.
Mitsubishi UFJ fell 1.8% to 1,067 yen, No. 2 Mizuho Financial Group slipped 1.4% to 552,000 yen and Sumitomo Mitsui Financial Group, the third-biggest bank, shed 1.4% to 896,000 yen.
Amid a broad-based market decline, investors shrugged off the likely positive impact on exporters from the dollar’s jump to a three-month high against the yen in Tokyo.
Canon Inc. fell 1.8% to 5,350 yen, Advantest Corp shed 4.6% to 2,520 yen. On the upside, Softbank Corp, Japan’s third-biggest mobile phone operator, rose 0.7% to 1,870 yen on its plans to start selling Apple Inc.’s new iPhone in Japan from 11 July.
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First Published: Tue, Jun 10 2008. 10 59 AM IST
More Topics: Nikkei | Topix | Lehman Brothers | Stocks | Mitsubishi |