Roundup: Nikkei falls 0.84 pct on eurozone fears, geopolitical tension
Wednesday, November 24, 2021 4:41 AM

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TOKYO, Nov. 22, 2010 (Xinhua News Agency) -- Tokyo stocks ended lower Wednesday, with the Nikkei stock index losing 0.84 percent, as fears grew about the health of the eurozone following Ireland's debt rating cut and geopolitical tensions over incidents on the Korean Peninsula weighed on investor sentiment.

Brokers said that Standard & Poor's (NYSE:MHP) downgrading of Ireland's long-term debt from AA minus to A (with the short-term rating cut from A minus 1 plus to A minus 1), sparked fears of contagion in the eurozone and dampened investor sentiment.

According to the agency, Ireland's net debt projection at the end of 2012 is expected to exceed previous projections of 113 per cent of GDP. The agency said that Irish debt remains one of the highest in the eurozone, reaching 325 per cent of GDP at the end of 2009.

Adding to investor consternation are growing tensions on the Korean Peninsula following artillery fire between the Democratic People's Republic of Korea (DPRK) and the Republic of Korea (ROK).

Some analysts said that Japan's proximity to the incidents spurred dumping of shares.

"The Korean situation was unexpected and that triggered flows out of risk assets as Japanese shares have been on an uptrend for some time. But since the pace of gains was rapid, there are those who weren't able to buy, and the appetite for dip-buying is strong, " said Toshikazu Horiuchi, equity strategist at Cosmo Securities Co.

Other analysts played down the effects of growing friction between the two Koreas on Tokyo stocks, saying that loses were limited.

"I believe Tokyo participants have reacted pretty calmly to the Korean turmoil, which resulted in limited falls in Japanese shares today," said Shoji Yoshigoe, a senior strategist at Mitsubishi UFJ Morgan Stanley (NYSE:MS) Securities.

"The fact that falls in South Korean shares were limited was also positive for Japanese stocks," he said.

Following the national holiday on Tuesday, the 225-issue Nikkei lost 85.08 points, or 0.84 percent, from Monday at 10,030.11, while the broader Topix index of all First Section issues on the Tokyo Stock Exchange fell 8.91 points, or 1.02 percent, to 866.57.

Market players were buying on dips and short-covering helped support the market in early trade as the Nikkei lost ground. Other Asian bourses trading in positive territory also saw losses trimmed, brokers said.

With the yen rising to 110.75 against the euro during trading hours Wednesday and the dollar stable in the lower 83 yen range, some exporters came under pressure as they rely on a weak yen to boost their overseas profits and competitiveness.

Tokyo Electron lost 2.1 percent to 5,150 yen and Advantest Corp. (NYSE:ATE) fell 1 percent to 1,700 yen. Shin-Etsu Chemical Co. (OOTC:SHECY) , a maker of silicon wafers, dropped 2 percent to 4,130 yen.

Taiyo Holdings Co., a maker of ink for circuit boards, was a notable gainer however, climbing 2.6 percent to 2,374 yen. The company said it will buy back up to 1.93 percent of its shares for as much as 1.5 billion yen (18 million U.S. dollars).

The company also plans to resume construction of a plant in China to meet demand, sources with knowledge of the matter said.

Trading houses and resource-related issues lost ground Wednesday, with Mitsubishi Corp. falling 1.4 percent to 2,115 yen and fellow trading house Mitsui & Co. slipping 0.8 percent to 1, 330 yen.

Trading house Sojitz Corp., however, leapt 9.1 percent to 168 yen, following news that the company and Australia's Lynas Corp. (OOTC:LYSDY) plan to supply about 25 percent of Japan's annual imports of rare earth metals (TSXV:RA) (OOTC:RAREF) , according to Lynas' chairman.

But oil explorer Inpex Corp. (OOTC:IPXHY) retreated 2.1 percent to 438,000 yen and Japan Petroleum Exploration Co. closed down 1.3 percent at 3,060 yen.

Japan's megabanks were among notable decliners, led by Sumitomo Mitsui Financial Group (NYSE:SMFG) who slumped 2.5 percent, to 2,590 yen. Mizuho Financial Group (NYSE:MFG) fell 1.5 percent to 136 yen and top-lender Mitsubishi UFJ Financial Group (NYSE:MTU) retreated 2 percent to 405 yen.

Among the day's biggest gainers were Fast Retailing Co. (OOTC:FRCOY) , owner and operator of Japan's largest chain of budget apparel stores, who climbed 3.6 percent to 13,870 yen. Sales at its Uniqlo stores on Nov. 20 were 10.2 billion yen (122.68 million U.S. dollars), a record for a single day, the company said recently.

Meanwhile it was also a good day for Dydo Drinco Inc. The drinks maker added 3.4 percent to 2,930 yen, following the company announcing its operating profit grew 35 percent to 5.93 billion yen (72 million U.S. dollars) from a year earlier for the same period.

Trading volume on Wednesday rose to 2.12 billion shares on the Tokyo Exchange's First Section, up from 1.74 billion on Monday.

Declining issues outnumbered advancing ones by 1,142 to 399.

(Source: )
(Source: Quotemedia)


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