Nikkei edges down 0.7% as oil slips

Nikkei edges down 0.7% as oil slips
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First Published: Thu, Jun 05 2008. 12 10 PM IST
Updated: Thu, Jun 05 2008. 12 10 PM IST
Tokyo: Japan’s Nikkei average edged down 0.7% on 5 June as lower oil prices took a toll on Mitsubishi Corp and other trading houses, while banks slid on renewed worries about US financial institutions in the face of possible bond insurer downgrades.
A rise in Japanese government bonds also eroded shares, but general bargain-hunting as well as buying of shares such as Softbank Corp, which said it will start selling Apple Inc’s iPhone in Japan, helped provide a floor for the market.
Shippers powered higher to offer additional support.
“Earlier this week we were seeing money coming from bonds into stocks, but today the opposite is taking place, along with some worry about the bond insurers,” said Yutaka Miura, a senior technical analyst at Shinko Securities.
“Also, the market couldn’t go on indefinitely outperforming the US the way it has been earlier this week — there’s a limit to this kind of a move.” Miura noted.
Credit rating
Moody’s Investors Service said it is likely to cut the top credit ratings of the bond insurance arms of MBIA Inc and Ambac Financial Group on concerns about mortage-related losses and limited business prospects.
Japanese banks slipped as a result. Top lender Mitsubishi UFJ Financial Group fell 2.9% and Mizuho Financial Group slipped 3.7% to 576,000 yen. Sumitomo Mitsui Financial Group was down 1.9% at 936,000 yen.
Oil extended its losses, with US light crude for July delivery down 45 cents at $121.85, dragging down oil-related firms and trading houses.
Top oil distributor Nippon Oil Corp slid 4.7% to 724 yen, becoming one of the biggest drags on the Nikkei 225. It was followed closely by trading company Mitsui & Co, with losses of 4.3% to 2,465 yen and Mitsubishi, down 3% at 3,530 yen.
Trade picked up, with 2.5 billion shares changing hands on the first section of the Tokyo stock market, compared with last week’s daily average of 1.98 billion. Advancing shares outnumbered declining ones by nearly two to one.
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First Published: Thu, Jun 05 2008. 12 10 PM IST
More Topics: Markets | Japan | Stocks | Nikkei | Oil |