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Nikkei down 2.5%, shares dumped on economy woes

Nikkei down 2.5%, shares dumped on economy woes
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First Published: Fri, Sep 05 2008. 09 54 AM IST
Updated: Fri, Sep 05 2008. 09 54 AM IST
Tokyo: Japan’s Nikkei stock average shed 2.5% on Friday, and fell as much as 3% at one stage, as investors dumped a wide range of shares on growing gloom about the global economy.
Mizuho Financial Group and other banks led the market lower, while Sony Corp slid 4% and touched its lowest level in nearly three years after a recall of its Vaio laptops.
Notable losses were also posted by Sumco Corp which fell 10.4% after a brokerage downgrade, and Resona Holdings Inc which sank 8.2%.
“Wall Street fell sharply on fears about upcoming US jobs data and the increasingly gloomy outlook for the world economy, especially in Europe,” said Nagayuki Yamagishi, a strategist at Mitsubishi UFJ Securities.
“Investors are dumping risky assets and fleeing to quality.”
Exporters took a hit as the yen soared to a 13-month high against the euro The dollar was clawing higher against the yen but still around 107 yen.
The benchmark Nikkei shed 319.05 points to 12,238.61, although it had earlier dipped as low as 12,163.33, its lowest since March 19. The broader Topix was down 2.5% to 1,171.11 after also falling 3% earlier.
Market players said that further falls were possible given the worsening economic climate around the world. The Nikkei hit this year’s low of 11,691 set on March 17.
Sony Slide
Sony’s shares slid 4.2% to 3,880 yen, its lowest level though since late 2005, hit by the downturn in investor sentiment and after it said it would recall 438,000 Vaio portable computers due to possible overheating that could burn users. Banks were among the big losers, with Mizuho tumbling 6.8% to 411,000 yen and taking its week’s losses to 13%.
Top lender Mitsubishi UFJ Financial Group lost 4.9% to 754 yen and Sumitomo Mitsui Financial Group was down 4.2% to 588,000 yen. Resona fell to 932,000 yen.
Sumco Corp fell after Mitsubishi UFJ Securities cut its rating to “4” from “3” saying the maker of silicon wafers used for semiconductors is likely to suffer a sharp profit decline next business year due to heavy depreciation costs.
Trade picked up, with 1.05 billion shares changing hands, compared with last week’s daily average of 676 million.
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First Published: Fri, Sep 05 2008. 09 54 AM IST
More Topics: Markets | Japan | Stocks | Nikkei | Traders |