Tue, November 16, 2010
Business > Markets

Nikkei falls 0.31% as fresh trading cues lack, Asian bourses weigh

2010-11-16 10:06:05 GMT2010-11-16 18:06:05 (Beijing Time)  Xinhua English

TOKYO, Nov. 16 (Xinhua) -- Tokyo stocks retreated Tuesday with the key Nikkei stock index slipping 0.31 percent as a weak yen sent utility prices down and concern about monetary tightening in China, caused some investors to hit the sidelines and see how it allays out.

Brokers said that the market was loosing some of its momentum due to a lack of thresh trading cues, now that earnings season has come to an end. Other analysts also pointed to a weakening sentiment caused by poor performances on other Asian markets and growing fears about money tightening in China.

"Now that earnings are mostly out, both U.S. and Japanese markets lack major trading cues," said Nikko Cordial senior strategist Tsuyoshi Kawata. "There isn't necessarily much optimism about the outlook for the economy and the market," he added.

Tachibana Securities' Kenichi Hirano also noted that with South Korea raising its key interest rate and a generally higher cost of credit in the Asia-Pacific region outside Japan, there is less clarity in financial markets, and ostensibly, a reduced appetite for equities.

"The decline in utilities has to do with the weak yen because they have to buy oil, which is priced in U.S. dollars,"said Hidehiro Tomioka from MFC Global Investment Management Ltd. " Commodity weakness is partly due to the strong U.S. dollar, and concern about a possible slowdown in China's growth.

The 225-issue Nikkei Stock Average fell 30.41 points, or 0.31 percent, from Monday to 9,797.10, whilst the broader Topix index of all First Section issues on the Tokyo Stock Exchange lost 3.79 points, or 0.45 percent, to 847.77.

A key gauge of utilities plunged the most in a month as a weak yen boosted costs for fuel, subsequently, trading companies retreated as commodity prices weakened.

Tokyo Gas Co., Japan's No. 1 natural-gas distributor, fell 1.6 percent and Inpex Corp., Japan's largest oil- explorer, dropped at least 0.8 percent after oil prices weakened and trading house Mitsui & Co., which counts commodities as its biggest source of profit also fell 0.8 percent.

Nippon Yusen KK, Japan's leading shipping line by sales, fell 1. 1 percent to 354 yen after cargo tariffs dropped. Declines by power producers overshadowed the benefits of a weaker yen for exporters. Toyota Motor Corp., the world's largest carmaker, climbed 0.5 percent.

Individual issues rose on positive earnings, outlooks and upgrades, with Fast Retailing ended up 4.0 percent to 13,000 yen after hitting a three-month high, due partly to expectations for winter clothing sales at the firm's Uniqlo stores as temperatures fall nationwide. Speculation is also emerging that Uniqlo's November sales may increase on year for first time in four months.

Consumer lenders Aiful, Acom, and Promise all rose sharply as Nomura Securities upgraded them to "buy" from "sell," citing fewer- than-expected applications for overcharged interest refunds than previously estimated under new regulations, and said consumer lender shares had priced in "a too pessimistic" scenario.

Aiful surged 6.3 percent to 85 yen, while Acom added 9 percent to 997 yen and Promise climbed 7.2 percent to 539 yen.

Trading volume on Tuesday rose to 1.83 billion shares on the Tokyo Exchange's First Section, up from 1.69 billion on Monday.

Advancing issues outnumbered declining ones by 945 to 549.

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