The FINANCIAL — Tokyo stocks fell sharply on August 17 morning as optimism about a global economic recovery dampened on weak U.S. consumer sentiment, sending Wall Street down Friday, and a stronger yen dragged on Japanese exporters.
The 225-issue Nikkei Stock Average fell from Friday's 10-month closing high, losing 237.08 points, or 2.24 percent, to 10,360.25. The broader Topix index of all First Section issues on the Tokyo Stock Exchange was down 19.09 points, or 1.96 percent, to 954.48.
Stocks fell in all the TSE's 33 industrial sectors, led by insurance, oil and coal product, and real estate issues.
''While the currency and bond markets have been responding frankly to negative economic indicators, Japanese stocks have recently been ignoring most negative incentives and reacted only to positive ones,'' said Masatoshi Sato, a senior strategist at Mizuho Investors Securities Co. ''With New York shares down Friday, finally Tokyo took the cue.''
U.S. stocks fell Friday as poor consumer sentiment underpinned worry that U.S. demand remains weak.
"Sato added that coupled with selling for gains after the closely watched data on Japanese economic growth in the April-June quarter released early Monday turned out to be in line with market forecasts, selling pressure mounted," Nikkei informs.
The Japanese economy grew an annualized real 3.7 percent in the April-June quarter, the first expansion in five quarters.
''The market's expectations have been swelling, so while the actual figures came out just as economists predicted, I think investors were hoping it would be a bit stronger,'' Sato said.
Carmakers and other exporters in particular were hit as a weaker U.S. dollar, trading at the mid-94 yen level, hurts their overseas profits, brokers said. Bellwether Sony fell 110 yen, or over 4 percent, to 2,605 yen, and Nissan Motor lost 23 yen, or over 3 percent, to 706 yen.
Meanwhile, resource-related issues succumbed to lower commodity prices. Japan Petroleum Exploration fell 70 yen, or over 1 percent, to 4,770 yen and trading house Mitsui lost about 3 percent.
Mizuho Financial Group, the morning leader in both value and volume terms, lost 5 yen, or over 2 percent, to 231 yen.
On the First Section, declining issues outnumbered advancing ones 1,362 to 224, with 96 others ending the morning unchanged.
Bucking the trend were medical shares after Japan reported its first death linked to the new strain of influenza Saturday.
Daiichi Sankyo, which is developing a new drug for children deemed more effective than Tamiflu, gained 38 yen, or almost 2 percent, to 1,980 yen. Shikibo, involved in making surgical masks, jumped 18 yen, or almost 10 percent, to 201 yen.
Trading volume on the main section came to 969.92 million shares, down from Friday morning's 1,087.90 million.
The TSE's Second Section index was down 3.85 points, or 0.17 percent, to 2,286.20 on a volume of 20.15 million shares. On the Osaka Securities Exchange, the near-term September Nikkei 225 index futures contract was down 230 points to 10,360.
Discussion about this post