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)/T Japanese Index Falls 4% 01/04/08 O/T

Discussion in 'Uncategorized Threads' started by Earl4140, Jan 4, 2008.

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  1. Earl4140

    Earl4140 TS Member

    Aug 8, 2007
    FYI- Japan's Nikkei stock average tumbled 4% to its lowest close in 17 months on Friday as investors dumped shares across the board on concerns a stronger yen, higher oil prices and a shaky U.S. economy would dent corporate profits.
    High-tech shares and automakers such as Sony were among the hardest hit, with the yen trading near a five-week high on the dollar and a weak set of economic data from the United States sparking jitters over a key market for Japanese exports.

    The frenetic half-day session followed a week-long vacation for Japanese financial markets during which the Dow Jones industrial average tumbled more than 2% and the price of crude oil topped $100 for the first time, threatening the oil-dependent Japanese economy.

    "There's so much uncertainty now about the U.S. economy, the dollar/yen rate, and crude oil prices that it's pretty hard to see how anybody could buy," said Yutaka Miura, a senior technical analyst at Shinko Securities.

    Market participants were divided on where the fall might halt, but shares failed to get a lift out of comments by Japanese Financial Services Minister Yoshimi Watanabe, who said on Friday that Japanese stocks are relatively cheap with a price-to-earnings ratio of about 15.

    The average for the Standard & Poor's 500 index is 14 and that of the FTSEurofirst 300 index of major European shares is 11, according to Reuters data.

    "I have a bit of a sense that the market was oversold, especially in comparison with other Asian markets," said Soichiro Monji, chief strategist at the equity management department of Daiwa SB Investments.

    "The Japanese market has already factored in weak results for the December U.S. jobs data due out tonight, so unless it's much worse than expected, we could expect the Nikkei to recover by 100 to 200 points early next week."

    The Nikkei closed down 4.03% at 14,691.41 after shedding 616.37 points, its biggest daily percentage loss since Aug. 17, 2007.

    The broader TOPIX closed down by 4.3% at 1,411.91, shedding 63.77 points for its lowest close since October 2005.

    The Nikkei ended 2007 at 15,307.78, a loss for the year of 11%, its first fall in five years, making Tokyo the world's worst-performing major stock market. The strong yen — which was around 109.42 yen to the dollar by mid-afternoon — battered exporters, many of whom have assumed a rate of 110 yen to the dollar. A stronger yen makes Japanese products more expensive in overseas markets and cuts into profits brought back to Japan.

    Nissan slid 9.2% to 1,117 yen, with Mazda Motor Co close behind with a loss of 7.7% at 515 yen.

    Sony slid 6.6% to 5,790 yen and Canon Inc by 5% to 4,940 yen. Hitachi was down 4.7% to 794 yen.

    Losses in U.S. semiconductors also weighed on Japan.

    An overnight tumble of 2.7 by Intel, the world's largest chipmaker, brought its decline for the first two trading days of 2008 to nearly 8% after Bank of America downgraded several microchipmakers on Wednesday.

    Tokyo Electron fell 7.1% to 6,370, becoming one of the biggest drags on the Nikkei 225, while Advantest Corp fell 6.76% to 2,965 yen.

    Not even oil-related firms escaped unscathed, with Nippon Oil Corp fell 7.6% to 840 yen.

    But oil developer INPEX Holdings did manage to eke out a rise of 0.83% to 1.2 million yen to become one of the day's few gainers.

    Trade was active, with 1.4 billion shares changing hands in the half-day session, nearly twice the last week's morning average of 724 million shares.

    Declining shares beat advancers by nearly 39 to one.

    Copyright 2008 Reuters Limited.
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