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Nikkei down 0.32% as post-quake corporate earnings weigh

04-07-2011 10:14 BJT Special Report:9.0 Magnitude Earthquake Rocks Japan |

TOKYO, April 6 (Xinhua) -- Tokyo stocks fell Wednesday, with the key Nikkei stock index falling 0.32 percent as investors struggle to gauge the affect on profits for a broad range of companies following last month's massive quake, tsunami and ongoing nuclear crisis.

The markets got an early boost as the U.S. dollar rose to the 85 yen range making some export-related issues an attractive proposition, brokers said, but the markets quickly moved into negative territory as renewed fears about the affect of the March 11 quake and tsunami will have on Japanese firms' earnings reports weighed heavily.

"We know about some of the direct damage from the earthquake and tsunami, but information on secondary damage is still scarce," said Investrust CEO Hiroyuki Fukunaga, noting supply-chain problems faced by auto makers and other sectors

Other market analysts highlighted the fact that incentives to buy Japanese issues were dropping on news manufacturers are finding it hard to source supplies, particularly in the automotive industry, and despite a weaker yen concerns remain rife about the future of factories' production capacity.

"Investors continue to eye the disaster impact on corporate earnings, and since we hear about the shortage of parts and other factors surrounding automakers daily, it has become harder to buy stocks," said one Tokyo-based market analyst.

"While the yen's weakness has a positive effect on exporters, high-tech companies and automakers that have been leading the Japanese economy cannot enjoy its full blessings when their production capacity is limited due to the disaster," she said.

The 225-issue Nikkei Stock Average lost 31.18 points from Tuesday to 9,584.37, while the broader Topix index of all First Section issues on the Tokyo Stock Exchange fell 7.55 points, or 0. 89 percent, to close at 839.61.

Despite owner of the notorious Fukushima nuclear Daiichi power plant, Tokyo Electric Power Co. (TEPCO), managing to stop a flow of radioactive water from the plant going directly into the sea, the utility firm's stock plunged for a fourth consecutive day.

Market players said that the firm's shareholders are in a quandary as to whether to bet against the stock and hope it falls to zero, or hope the shareholders don't get held financially responsible as TEPCO goes about paying compensation to evacuees and businesses in the area and its own costs regarding restoration, as it continues to battle to bring the six-reactor facility under control.

TEPCO shares dropped 6.9 percent to 337 yen and the company has lost 84 percent of its market value since the earthquake and has bypassed its record low level since listing on the exchange in August 1951.

The utility firm's shares were the most actively traded by volume and value Wednesday with 303 million shares changing hands.

Banks holding TEPCO debt retreated Wednesday on fears the company will declare bankruptcy and the outstanding debts will be wiped-out and Sumitomo Mitsui Financial Group lost 2 percent to 2, 494 yen.

Mizuho Financial Group fell 1.5 percent to 129 yen and top- lender Mitsubishi UFJ Financial Group dropped 2.6 percent to close at 372 yen.

But fishing companies reversed recent losses as TEPCO said they would discontinue dumping radioactive water from their plant into the Pacific Ocean to clear space in tanks for more highly- contaminated water.

Maruha Nichiro advanced 2.6 percent to 118 yen and Nippon Suisan Kaisha Ltd. added 1.9 percent to 216 yen. Hohsui Corp. climbed 2.2 percent to close at 92 yen.

And among Japanese exporter issues, Toyota Motor edged up 0.15 percent to 3,265 yen despite Moody's Investors Service saying it had put the firm on review for a possible downgrade on the company 's debt rating.

But Nissan Motor fell 0.4 percent to 712 yen and Honda Motor skidded down 1.3 percent to 2,895 yen.

Canon gained 0.8 percent, to 3,630 yen, but Komatsu lost 0.5 percent to 2,767 yen, following recent credit-tightening moves in China, one of the firm's biggest markets.

Trading volume on Wednesday increased to 2.71 billion shares on the Tokyo Exchange's First Section, up from Tuesday's volume of 2. 61 billion shares, with declining issues trumping advancing ones by 1,345 to 264.

Editor:Yang Jie |Source: Xinhua

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