Monday May 12, 02:09 AM
Tokyo shares lower on record oil prices, U.S. credit concerns - UPDATE
TOKYO (Thomson Financial) - Japanese shares were lower in early trade on Monday, tracking the fall on Wall Street on Friday after insurer American International Group (NYSE: AIG - news)
disclosed a huge first-quarter loss while oil prices surged to new record levels.
'I think the market has entered into a short-term correction phase after the short-covering rally had run its course,' said Mitsushige Akino, chief fund manager at Ichiyoshi Management.
'Although extreme pessimism (over the global credit crisis) has receded, gains in stocks may be capped as surging oil prices are likely to dampen U.S. consumer (demand) while pushing up the yen against the dollar,' Akino said.
On Friday on Wall Street, the Dow Jones Industrial Average suffered a loss of about 120 points as bigger-than-anticipated quarterly losses from insurer American International Group rekindled anxiety about the strained state of the global financial system.
AIG said it swung to a first-quarter loss of $7.81 billion because of losses tied to credit swaps and mortgage-related operations. The world's biggest insurer also said it plans to raise a total of $12.5 billion in new cash to shore up its capital base.
Meanwhile, rising crude oil prices weighed on U.S. investor sentiment. Light (LIGT3.SA - news) , sweet crude rose as high as $126.20 on the New York Mercantile Exchange before settling at a record $125.96.
The dollar was last quoted at 102.77 yen, down from 103.08-11 at 5.00 p.m. on Friday. The renewed appreciation of the yen added to investor worries.
At 9:25 a.m. (0025 GMT), the Nikkei (news) 225 Stock Average was down 98.11 points or 0.7 percent at 13,557.23. The broader Topix shed 11.38 points or 0.9 percent to 1,330.38.
Among early decliners were exporters and banks.
Toyota Motor (Frankfurt: 853510 - news) lost 1.7 percent at 5,210 yen. Consumer electronic giant Sony (Munich: 853687 - news) shed 0.9 percent to 4,580 yen. Office equipment manufacturer Canon (Berlin: CNN1.BE - news) slipped 1.1 percent to 5,200 yen.
Mitsubishi UFJ Financial (Berlin: MFZ.BE - news) fell 2.3 percent to 1,063 yen, Sumitomo Mitsui Financial (Munich: 778924 - news) dropped 1.3 percent to 834,000 yen and Top brokerage Nomura Holdings (N33.SI - news) retreated 3 percent to 1,736 yen
Shares of Takeda Pharmaceutical Co (Berlin: TKD.BE - news) . advanced 1.6 percent to 5,580 yen after the drugmaker on Friday reported record net profit for the past year to March.
($1 = 102.77 yen)
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