Monday January 26, 07:06 AM
Nikkei at 3-mth closing low on earnings fear, yen
By Elaine Lies
TOKYO, Jan 26 (Reuters) - Japan's Nikkei (news) stock average hit a
nearly three-month closing low in thin trade on Monday, sliding
0.8 percent on earnings concerns after Komatsu Corp
issued a profit warning and the dollar pared gains against the
yen, sinking exporters.
The closing low of 7,682.14 was the lowest since Oct. 28,
when the benchmark Nikkei briefly fell to an intraday
low of 6,994.90 -- a 26-year low.
Monday's slide was slowed as investors snapped up battered
shipping firms on the view they had been oversold and hopes that
Chinese imports may be picking up, while defensive shares rose.
But the biggest drag on shares came from fears about
earnings as Japan's corporate results season moves into high
gear this week, with Sony Corp (Munich: SON1.MU - news) due to announce on
Thursday after warning of massive losses last week.
Concerns about earnings in the United States, with some 137
companies in the S&P 500 and 12 Dow components set to announce
this week, will also keep buying limited, market players said.
'There are places that, like Sony and Komatsu (Berlin: KOM1.BE - news) , suddenly
slashed their forecasts, and we have U.S. earnings as well,'
said Hiroaki Osakabe, a fund manager at Chibagin Asset
Management.
'This is not the kind of atmosphere in which you want to buy
actively.'
Though shares were bolstered earlier on Monday as the dollar
advanced against the yen, euro and sterling, with the latter two
under pressure on growing economic worries in the region, the
U.S. currency later pared its gains.
At 0608 GMT, the dollar was trading at 88.78 yen, nearly
flat but off last week's low of 87.10, the dollar's lowest since
July 1995.
Investors welcome a softer yen as it boosts exporter profits
when repatriated.
The benchmark Nikkei shed 63.11 points in a day of
choppy trade, with many Asian markets closed due to the Lunar
New Year and Australia and India closed for national holidays.
The broader Topix lost 0.7 percent to 768.28.
'This week we have one set of results after another, and
Komatsu's warning has scared investors,' said Takashi Ushio,
head of the investment strategy division at Marusan Securities.
'We know this results season will be bad, and this is
inhibiting buying.'
SHADOWED BY EARNINGS
Earth-moving and construction machinery maker Komatsu, which
competes with world No.1 Caterpillar Inc (NYSE: CAT - news) , dropped 4.7
percent to 909 yen after slashing its profit forecast for this
year by a third on Friday to well below the market consensus,
blaming a sudden slump in global demand.
Exporters dragged the Nikkei lower as the dollar sagged in
later trade, with Canon Inc (Berlin: CNN1.BE - news) down 3.6 percent and Honda
Motor Co losing 1.8 percent. Sony shed 3.1 percent.
But the bad news was countered by Kyocera (Munich: KYR.MU - news) , which was off
earlier highs but still gained 2.3 percent to 5,800 yen after
financial newspaper Barron's said the electronics parts maker is
in an excellent position to benefit from an economic recovery,
as it has strong positions in such businesses as solar panels
and cellphones.
'Kyocera could well be in good shape because it maintains a
good balance between different businesses, with its solar
batteries likely to be a key earner as the U.S. emphasises clean
energy,' said Marusan's Ushio (Berlin: UHO.BE - news) .
On Monday, Shin-Etsu Chemical Co, the world's
biggest maker of wafers and PVC, posted a 15 percent drop in
quarterly profit and declined to disclose an annual profit
outlook due to rapidly declining demand amid the global
recession.
Shares in the company, though, edged up 0.8 percent to 3,940
yen.
Mitsui O.S.K. Lines rose 3.8 percent to 551 yen
after the Baltic Dry Exchange, a key freight index,
gained 3.7 percent on Friday. Nippon Yusen (Frankfurt: NYKA.F - news) , Japan's
largest shipping firm, gained 1.3 percent to 463 yen.
'Shipping firms seemed to have bottomed out at the end of
last year, and signs of growing China import demand has kept the
Baltic Dry Exchange supported recently, so we can look for some
gains,' said Chibagin Asset Management's Osakabe.
Defensive shares, popular in the face of economic turmoil
overseas, also provided support.
Asahi Breweries Ltd (Frankfurt: ABW.F - news) gained 2.8 percent to 1,347 yen
after Japan's second-biggest beer maker said it would buy a
19.99 percent stake in China's Tsingtao Brewery from
Anheuser-Busch InBev NV for $667 million.
Trade was light on the Tokyo exchange's first section, with
1.62 billion shares changing hands, compared with last week's
daily average of 1.77 billion.
Declining stocks outpaced advancing ones, 834 to 749.
(Reporting by Elaine Lies; Editing by Hugh Lawson)
|
|
|
Send Article by Email
Send Article by IM
Blog This with Y! 360
Printable View
