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Nikkei down 0.3 pct in opening trade

The Nikkei average slips 0.31 per cent, declining for the third straight session as a firmer yen weighed on big Japanese exporters such as Advantest Corp.

business Updated: Jun 26, 2007 09:15 IST
Aiko Hayashi
Aiko Hayashi

The Nikkei average slipped 0.31 per cent on Tuesday, declining for the third straight session as a firmer yen weighed on big Japanese exporters such as Advantest Corp.

Shares of property firms such as Sumitomo Realty & Development Co Ltd rose as investors bought on dips, though it will likely take a while until investors move away from exporters and go after domestic-demand stocks, said Katsuhiko Kodama, senior strategist at Toyo Securities.

"Investors appear to be taking profits in high-tech exporters, which rose a lot on Monday and are weighing heavily on the index, as the yen is becoming slightly stronger," he said.

"I don't see any pillar -- either an individual stock or a sector -- that can push up the market right now."

The Nikkei ended the morning down 56.45 points at 18,031.03, and the broader TOPIX index fell 0.37 per cent to 1,758.37.
Kodama said investors were focusing on US stock moves as the market lacked major domestic leads to trade on ahead of CPI data due on Friday.

Norihiro Fujito, a general manager of Mitsubishi UFJ Securities' investment research and information division, said problems in the US subprime mortgage market shouldn't have a direct impact on Japan, including financial stocks.
"This might weigh on investor sentiment, but it seems unlikely the problem over there will directly affect the earnings of Japanese companies," he said.

US stocks closed lower on Monday as growing concerns about the subprime mortgage market dragged down shares of Bear Stearns Cos. and Goldman Sachs Group.

The dollar fell 0.2 per cent from late US trade to 123.40 yen down from a 4-1/2-year high of 124.14 yen reached on electronic trading platform EBS last week.

A stronger yen weighs on exporters as it cuts the value of their overseas sales when translated back into the Japanese currency.

Trade volume slowed with 851.6 million shares changing hands, compared with 900.3 million shares on Monday. Declining shares outnumbered advancers by nearly two to one.

Shares of exporters fell, with Advantest down 2.3 per cent to 5,420 yen and Honda Motor Co Ltd falling 0.7 per cent to 4,390 yen.

But property issues gained as Sumitomo Realty & Development rose 1.3 percent to 4,050 yen and Mitsui Fudosan Co Ltd added 1.5 per cent to 3,480 yen.

Elsewhere, online brokerage Matsui Securities Co Ltd rose 2.1 per cent to 1,125 yen after a report that Mitsubishi UFJ Financial Group Inc., Japan's largest bank, intended to take a 15 per cent stake in the brokerage by the end of next March.
Matsui said in a statement that nothing had been decided on the reported capital tie-up.

Nursing-care service provider Goodwill Group Inc plunged to its daily limit low of 45,700 yen, down 9.9 per cent from Monday's close, after saying on Monday it would issue rights for 400,000 new shares to the London branch of Deutsche Bank AG to reinforce its shareholders' equity.

Elpida Memory Inc. fell 3.8 per cent to 5,580 yen after spot prices of dynamic random access memory (DRAM) dipped following a rare rise last week, underlining the weakness of the market for Japan's only maker of DRAM chips.

Shares of Toyama Chemical Co Ltd were up 1.2 per cent at 856 yen, adding to a 13.4 per cent gain the previous session on news Swiss drugmaker Roche had bought the rights to develop and market a new rheumatoid arthritis drug from Toyama.

First Published: Jun 26, 2007 09:09 IST