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Nikkei down but off lows, exporters weak

Nikkei down but off lows, exporters weak
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First Published: Wed, Jun 25 2008. 11 11 AM IST
Updated: Wed, Jun 25 2008. 11 11 AM IST
Reuters
Tokyo: Japan’s Nikkei stock average was down 1% but off earlier lows as worries about the US economy hit Sony Corp and other blue-chip firms that are active players in Japan’s export-oriented economy.
The benchmark Nikkei was down 149.35 points at 13,700.21 after earlier slipping as low as 13,635.68, a nearly six-week low. The broader Topix was down 0.9% at 1,332.62.
Steel companies such as JFE Holdings Inc sank on fears Baosteel and Rio Tinto’s deal for an up to 96.5% hike in iron ore prices could add to costs for Japanese steelmills.
But the market was buoyed by large-scale buying of futures, with defensive shares such as East Japan Railway Co forging upwards amid thin trade before a closely watched US Federal Reserve meeting that ends on 25 June.
“The world economy is definitely slowing,” said Takahiko Murai, general manager of equities at Nozomi Securities.
“Talk of a US recovery was too optimistic, and worries here have been renewed. There’s also concern about emerging markets.”
Exports to the United States fell 9.5% in May to mark the ninth straight month of decline as slowing growth there dented demand for Japanese automobiles, while exports to the European Union were down 1.1%, Ministry of Finance data showed on 25 June.
US consumer sentiment slid to a 16-year low in June and house prices suffered a record annual drop in April, according to data on Tuesday that suggested a retrenchment in spending that will hinder already meager economic growth.
Sony slid 2.4% to 4,880 yen, Canon Inc shed 1.1% to 5,470 yen and Toyota Motor Corp slid 2.1% to 5,120 yen.
While Japanese steelmakers said they had not sealed a deal with Australian miners, the market expects they will eventually be forced to accept price hikes of the same margin.
Nippon Steel Corp the world’s second-biggest steelmaker, slipped 2.6% to 570 yen, recovering from earlier lows. No.3 steelmaker JFE Holdings slid 3.5% to 5,200 yen, while the iron and steel subindex ISTEL.dropped 2.4%.
East Japan Railway rose 1.3% to 839,000 yen and Central Japan Railway Co gained 1.8% to 1.1 million yen.
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First Published: Wed, Jun 25 2008. 11 11 AM IST
More Topics: Nikkei | Stocks | US Economy | Sony | Nissan |