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Markets volatile on Europe solution

10-26-2011 09:20 BJT

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Tokyo stocks fall on yen's rise, eurozone summit jitters

TOKYO, Oct. 25 (Xinhua) -- Tokyo stocks retreated Tuesday, with the benchmark Nikkei stock index falling 0.92 percent as the yen's rise coupled with profit-taking dragged down export-related issues and a circumspect mood ahead of a key summit in the eurozone kept some investors sidelined.

Local brokers said that the market mood was becoming increasingly anxious ahead of the result of a European summit on Wednesday at which broad plans to contain the region's debt crisis are expected to be laid out, including details about the level of the latest bailout fund.

"There are a lot of reasons for investors to stay on the sidelines right now, including the upcoming European summit and earnings," said Naoki Fujiwara, from Shinkin Asset Management Co. "People will be turning their focus on individual stocks than the overall market," he said.

Analysts also remarked, however, that the meeting may not produce the kind of comprehensive package that global markets are hoping for and the best-case-scenario may well be a deal that covers short-term interests of at-risk lenders in Europe, immediate debt waivers for Greece and the augmentation of the European Financial Stability Facility.

The 225-issue Nikkei Stock Average dropped 81.67 points from Monday to close at 8,762.31, while the broader Topix index of all First Section issues on the Tokyo Stock Exchange finished lost 7. 74 points, or 1.02 percent, to finish the day at 747.70.

Euro-sensitive shares lost ground with Mazda Motor, who has a large expose to European markets, losing 3.1 percent to 157 yen and Canon Inc., the world's largest camera maker, relinquishing 1. 8 percent to 3,490 yen.

Nippon Sheet Glass Co. meanwhile lost 1.2 percent to 170 yen and as the dollar was trading marginally above the 76 yen level during trading hours in Tokyo, exporters came under increased pressure, as the yen hit a record post-war high versus the U.S. dollar in New York on Friday.

Export related businesses in Japan rely on a weak yen to boost their competitiveness against rival firms in overseas markets and a weaker yen also serves to increase profits when revenue is repatriated.

Subsequently, Nintendo dropped 2.3 percent to 11,680 yen and Suzuki Motor lost 1.4 percent to 1,659 yen. NGK Insulators plunged 17.4 percent to 926 yen following reports the maker of electrical insulators asked customers not to use its sodium-sulfur batteries after a fire last month at a Mitsubishi Materials Corp. plant.

Endoscope maker Olympus Corp. advanced for the first time in seven days, jumping 8.2 percent to 1,189 yen, following a stock- lending service provider saying that short sales on the stock may become more difficult if limits are imposed on the number of shares available for trading, as may become the case.

Other issues were in the spotlight for individual news, with heavily-weighted KDDI edging up 0.2 percent to 565,000 yen, following the mobile service provider announcing Monday its net profit for the quarter ending in September climbed an annualized 4. 8 percent.

Industrial robotics maker Fanuc dropped 3.0 percent to 12,160 yen, as investors looked to lock in profits following the firm announcing earnings results that fell in line with market expectations.

Other machinery makers rose however on news that Caterpillar Inc. posted earnings far above median market forecasts, and earthmoving equipment maker Komatsu Ltd. climbed 3.1 percent to 1, 833 yen, while smaller rival Hitachi Construction Machinery Co. added 2.7 percent to fin the day at 1,432 yen.

Trading volume on Tuesday increased to 1.43 billion shares on the Tokyo Exchange's First Section, up from Monday's volume of 1. 34 billion shares, with declining issues outnumbering advancing ones by 1,188 to 367. (1 U.S. dollar equals 76.1 yen)


Editor:James |Source: CNTV

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