Be a responsible citizen. Come, pledge to always check and share verified and vetted news.
2-min read

Nikkei falls over 2 pc on Eurozone debt woes

News18test sharma |

Updated: November 3, 2011, 8:02 AM IST
facebook Twitter google skype whatsapp
Nikkei falls over 2 pc on Eurozone debt woes
The Nikkei average fell 2.2 per cent to end at the session low of 8,640.42, its lowest close since October 7.

Tokyo: The Nikkei share average fell more than 2 per cent on Wednesday to a three-week low on resurgent fears over the euro zone's debt woes, after Greece's surprise call for a referendum threatened to scupper a bailout plan aimed at containing the crisis.

Some investors also sold to square positions ahead of a Japanese public holiday on Thursday.

"With so much uncertainty surrounding Europe now, some investors think it's scary to carry long positions over a holiday," said Norihiro Fujito, senior investment strategist at Mitsubishi UFJ Morgan Stanley Securities.

Nomura Holdings tumbled after posting its first quarterly loss in 2-1/2 years, tripling its cost-cutting target to $1.2 billion to cope with market conditions that a top executive said were about as tough as the 2008 financial crisis.

Other big losers included construction equipment maker Komatsu Ltd , which had been sold off last month as fears about the European debt crisis intensified and then gained sharply on signs of progress towards a solution.

Sony Corp also lost ground ahead of its earnings announcement after the close, which brought a worse-than-expected downward revision to its full-year operating profit outlook after Thai floods disrupted its camera production.

The Nikkei average fell 2.2 per cent to end at the session low of 8,640.42, its lowest close since October 7. The broader Topix index dropped 2.1 per cent to 738.58.

The Nikkei dropped below support at its 25-day moving average around 8,727, which has now become a resistance point.

"The run-up in US and Japanese shares after the European plan was decided last week was too rapid, which is why markets just as suddenly gave back those gains," said Kenichi Hirano, operating officer at Tachibana Securities.

Investors are also awaiting the outcome of the US Federal Reserve's policy meeting, where the central bank could prepare markets for further monetary policy easing.

Hints of further easing would weigh on the dollar and lift the yen, at a time when Japanese authorities have vowed to continue to quell the currency's strength.

Japan on Monday sold a record of nearly $100 billion worth of yen, driving the dollar from a record low around 75.31 to a high of 79.51.

Nissan Slides

Trading was relatively thin but above recent levels, with 1.77 billion shares changing hands on the main board, up from 1.47 billion shares in the previous session. Nearly seven shares declined for each one that advanced.

"Investors are selling ahead of the holiday, locking in gains in case of further downside in U.S. stocks later," said Hideyuki Ishiguro, assistant manager of investment strategy at Okasan Securities.

Nomura fell 4.1 per cent to 282 yen.

Komatsu shed 5 per cent to 1,843 yen, and was the fourth-heaviest traded issue by turnover.

Sony dropped 3.6 per cent to 1,520 yen. After the close, it slashed its operating profit outlook to 20 billion yen ($255 million) for the year ending in March, compared with its previous estimate of 200 billion yen and market expectations of 166 billion yen in a Thomson Reuters I/B/E/S poll of 20 analysts.

Nissan Motor Co shares slipped 2.8 per cent to 701 yen ahead of the car maker's earnings due out later in the day, but still outperformed rivals after beating them in October US auto sales.

Nissan's US sales rose 18 percent, while Toyota Motor Corp's and Honda Motor Co's sales fell. Toyota's shares declined 3.5 per cent and Honda's skidded 4.2 percent.

Olympus Corp shares edged down 0.5 per cent to 1,200 yen. A panel set up to investigate the scandal-hit camera and endoscope maker wants to hear from the firm's ousted British chief executive and will need at least a month to report its findings, the panel's head said on Wednesday.

First Published: November 3, 2011, 8:02 AM IST
Read full article
Next Story
facebook Twitter google skype whatsapp