Nikkei hits 3-yr closing low, economy’s fear deepens

Nikkei hits 3-yr closing low, economy’s fear deepens
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First Published: Fri, Oct 03 2008. 01 29 PM IST
Updated: Fri, Oct 03 2008. 01 29 PM IST
Tokyo: Japan’s Nikkei average fell 1.9% to a three-year closing low on Friday for its worst week in more than a year, with growing fears about the global economy hitting high-tech firms, autos and exporters.
Toyota Motor fell to a three-year low and Nissan Motor dropped to its lowest level in nearly seven years, after major car companies reported a 26% drop in overall US sales for September as the crisis on Wall Street rocked consumer confidence.
“US indicators have been getting quite bad, and the rate at which they’re worsening has picked up,” said Hiroaki Osakabe, a fund manager at Chibagin Asset Management.
“Japan’s economy isn’t good, America isn’t good, Europe isn’t good. The next to be hit may be emerging economies - and this will just increase worries for an export-dependent economy like Japan’s.”
The benchmark Nikkei shed 216.62 points to 10,938.14, its lowest close since May 2005. It lost 8% on the week, its worst weekly drop since August 2007.
The broader Topix lost 2.7% for its lowest close since February 2004, finishing at 1,047.97.
On Thursday, the Dow shed more than 3% as data showing the number of people filing for unemployment benefits hit a seven-year high painted a troubling picture, as did a report showing a steep drop in factory orders in August.
The US Senate passed the government’s $700 billion financial rescue plan after the House of Representatives rejected it in its original form. The House is expected to vote on the revised bill on Friday, but market participants said even its passage was unlikely to stave off economic fears.
Some individual investors, though, appeared to be taking a more conservative view.
“I must hold onto my stocks,” said Akihiko Furukawa, 72, who owns his own company. “Some of them are bad stocks, but there’s no point in buying or selling shares now.”
Autos tumble, high-tech hit
Among the worst hit shares were automakers, who have suffered all week.
Shares of Toyota fell 5.3% to 4,080 yen, taking its weekly losses to 14% this week. Honda Motor Co fell 5.5% at 2,835 yen, its lowest close since mid-April, down 15% for the week.
Nissan lost 7% to 621 yen, bringing its losses for the week to 18%.
Toyota’s European sales forecast for next year is no longer realistic, the automaker’s regional head said on Thursday, adding that the figure is more likely to match last year’s level given the slowdown in the overall market and global economy.
High tech shares tumbled as well, with TDK Corp down 7.8% at 4,710 yen, making it the biggest drag on the Nikkei 225 by volume weight. Kyocera Corp slid 3.4% to 7,660 yen and industrial robot maker Fanuc Ltd fell 2.1% to 7,330 yen.
Canon Inc lost 4.2% to 3,840 yen and Nikon Corp tumbled 10.2% to 2,060 yen.
Fast Retailing Co surged 13.6% to 12,370 yen to become the top positive contributor to the Nikkei 225 after the firm said its Uniqlo casual apparel chain’s same-store sales jumped 20.8% in September, thanks to strong sales of autumn items.
Trade picked up on the Tokyo exchange’s first section, with 2.3 billion shares changing hands, compared with last week’s daily average of 1.9 billion.
Declining stocks outpaced advancing ones by more than 4 to 1.
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First Published: Fri, Oct 03 2008. 01 29 PM IST
More Topics: Market Crisis | Japan | Stocks | Nikkei | Money Matters |