|
(AFX UK Focus)
2008-11-13 01:34
Nikkei drops 4 pct on economy worries, yen rise |
|---|
| Article layout: raw |
|
TOKYO, Nov 13 (Reuters) - Japan's Nikkei average fell 4.7 percent on Thursday on a stronger yen and growing worries about the U.S. economy after the government backed away from using its $700 billion bailout to buy up bad mortgages. Exporters were hit hard following the dollar's slide below 95 yen on Wednesday, with shares in Honda Motor falling 3.7 percent and Sony Corp dropping 7.3 percent. Japan's largest advertising company, Dentsu Inc, fell 9.5 percent after its cut its annual profit outlook by 20 percent on Wednesday. Dentsu's slump reflects the pain being felt across the corporate sector. Its clients are cutting their advertising budgets as high raw materials prices, a stronger yen and a faltering economy eat into their profits. "It's pretty much weakness across the board," said Yutaka Miura, senior technical analyst for Shinko Securities, adding that Tokyo shares were hurt by the slide on Wall Street and the yen's surge on Wednesday. "There is a renewed recognition of the weakness in the economy and corporate earnings," Miura said. As of 0058 GMT, the benchmark Nikkei had shed 421.82 points or 4.9 percent to 8,273.69. The broader Topix fell 3.9 percent to 841.54. Tokyo shares are likely to take their cues during the day from moves in the yen, he added, noting that the yen's 0.7 percent dip against the dollar on Thursday following its sharp rise the day before, was lending Japanese stocks some support. The dollar rose 0.6 percent against the yen to 95.63 yen . U.S. Treasury Secretary Henry Paulson said on Wednesday the Treasury's focus now would be on shoring up financial institutions with direct investments, adding to uncertainty about how the government plans to revive bank lending and underscoring the extent of problems in the U.S. economy. More gloomy U.S. earnings news, including a dismal forecast from electronics chain Best Buy and a warning from tech bellwether Intel Corp that its fourth-quarter earnings will be weaker than expected, helped push the Nasdaq to its lowest close in five years on Wednesday. A point to watch will be whether Tokyo shares trim their losses in the afternoon as has been the case in some recent trading sessions, Miura said, adding that such moves have often taken place in tandem with a dip in the yen. Shares fell across a wide swathe of sectors, with defensive shares such as pharmaceuticals also coming under pressure. Takeda Pharmaceutical Co, Japan's largest drugmaker, fell 2.3 percent. Asahi Glass and Nippon Sheet Glass slid after the European Commission on Wednesday imposed its highest ever cartel penalty, fining a group of companies including them more than 1.3 billion euros.
Asahi Glass slid 6.6 percent to 506 yen and Nippon Sheet
Glass fell 7.8 percent to 318 yen, as the two companies said they
would review their profit forecasts in the wake of the decision.
(Reporting by Masayuki Kitano and Elaine Lies; Editing by Hugh
Lawson)
((masayuki.kitano@thomsonreuters.com; Reuters Messaging:
masayuki.kitano.reuters.com@reuters.net; +81-3-6441-1872))
(Multimedia versions of Reuters Top News are now available for: * 3000 Xtra : visit http://topnews.session.rservices.com * BridgeStation: view story .134 * Reuters Plus: from your WebDSS screen For more information on Top News, visit http://topnews.reuters.com)
COPYRIGHT Copyright Thomson Reuters 2008. All rights reserved. The copying, republication or redistribution of Reuters News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters. |
| Stocks |
| Article layout: raw |
|