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(AFX UK Focus)
2008-11-18 03:41
Nikkei down 1.0 pct as econ worries hit exporters |
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By Rika Otsuka TOKYO, Nov 18 (Reuters) - Japan's Nikkei share average fell 1.0 percent by midday on Tuesday as concerns over the weakening global economy hurt exporters such as Sony Corp. Mitsubishi UFJ Financial Group (MUFG), Japan's largest bank, was down 2.7 precent on intensifying worries over the financial sector after Citigroup Inc revealed on Monday a drastic job cut plan in a move to restore the No.2 U.S. bank. But the market managed to trim losses as some investors hunted bargains, while speculation that public pension funds will buy if the Nikkei falls nearer the psychologically key 8,000 point level prompted traders to buy back stocks. "Given dividend payouts, there are lots of stocks looking cheap. Long-term players such as household investors and pension funds are picking them up," said a senior fund manger at a Japanese life insurance firm. "At the same time, institutional investors and hedge funds are sticking to the sidelines as volatility remains high. That is one factor behind the market lacking momentum to rebound," he said. The benchmark Nikkei fell 82.17 points to 8,440.41 by midday after sliding as low as 8,302.24 during the morning. The broader Topix dipped 0.3 percent to 848.26. Trade volume was moderate on the Tokyo exchange's first section, with 950 million shares changing hands, almost in line with last week's morning average. Advancing shares slightly outpaced declining ones by 780 to 771. The yen's strength and fears of global recession dented exporters, with Sony falling 2.4 percent and Canon Inc slipping 1.5 percent. The dollar edged up 0.3 percent against the yen to 96.70 yen but remained near the psychologically important 100 yen level. Government data showed on Monday that Japan's economy has slipped into recession, confirming that the global financial crisis has sabotaged growth in yet another major economy, with the euro zone already in recession. Added to economy worries, U.S. Treasury Secretary Henry Paulson said on Monday that solid progress has been made in stabilising the U.S. financial system but it will take considerable time to restore it to help the economy to recover. Suzuki Motor Corp dropped 2.4 percent to 1,331 yen after the carmaker said on Monday that General Motors Corp will sell back its 3 percent stake in Suzuki for $232 million as the struggling U.S. automaker seeks to raise cash. But Toyota Motor Corp recovered initial losses to end midday up 1.3 percent up at 3,170 yen as bargain-hunting sat in.
Toyota fell in early trade after Fitch Ratings said on Monday
it may cut Toyota's top-notch credit ratings as a downturn in the
global auto industry and stronger yen hit profits at the world's
largest automaker.
(Reporting by Rika Otsuka; Editing by Michael Watson)
((rika.otsuka@thomsonreuters.com; +81-3-6441-1874; Reuters
Messaging: rika.otsuka.reuters.com@reuters.net))
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