Nikkei hits 3-week closing low

TOKYO Wed Oct 3, 2012 1:37pm IST

A man looks at an electronic monitor displaying share prices outside a brokerage in Tokyo August 19, 2011. REUTERS/Yuriko Nakao/Files

A man looks at an electronic monitor displaying share prices outside a brokerage in Tokyo August 19, 2011.

Credit: Reuters/Yuriko Nakao/Files

Related Topics

Stocks

   

TOKYO (Reuters) - Japan's Nikkei average fell to a three-week closing low on Wednesday as investors remained cautious ahead of a serious of key events this week, including policy meetings by the European Central Bank and the Bank of Japan and U.S. jobs data.

But losses were capped by gains in index heavyweight Fast Retailing Co Ltd (9983.T), which climbed 3.7 percent after the Nikkei daily said the operator of casual clothing chain Uniqlo should see sales top 1 trillion yen in the year ending August 2013, up 7.6 percent from its estimate of 929.50 billion yen in the last financial year.

The Nikkei slipped 0.5 percent to 8,746.87 points in relatively light volume, down for the fourth straight session, its longest losing run since early September.

"We have a few data points this week ... People are a bit wary," a senior dealer at a foreign bank said.

Nissan Motor Co dropped 2.1 percent after its U.S. passenger car sales fell 1.1 percent in September from the same month last year.

Rival Toyota Motor Corp saw a 41.5 percent jump year-on-year over the same period, leaving its share price up 0.4 percent.

"The poor performance by Nissan, however, combined with the significantly higher risk now in China, may lead to worse-than-expected profitability this term," Societe Generale said in a note.

But of the big three Japanese automakers, Nissan offers the cheapest valuation, with a 12-month forward price-to-earnings ratio of 6.3 versus Toyota's 9.7 and Honda Motor Co's 7.8, according to Thomson Reuters Datastream.

BOJ IN THE FRAME?

Both the ECB and the BOJ were due to start policy meetings on Thursday, with some market participants expecting the Japanese central bank to offer further monetary policy easing.

"I think the BOJ is likely to loosen monetary policy because they said they would act if the economy worsened, which their last tankan survey bore out," said Kyoya Okazawa, head of equities and commodity derivatives at BNP Paribas in Tokyo.

Underscoring concerns over sluggish Chinese growth, Australian exports dropped 3 percent in August from the previous year as a slowdown in China, the country's biggest export market, crimped shipments of raw materials such as metals and coal.

Investors fear Japanese firms' revenues in China, which is also Japan's largest export market, will fall sharply in September after some Japanese factories and shops were closed following protests triggered by a territorial dispute, which remains unresolved.

The Nikkei China 50 .NCHN, comprised of Japanese firms with heavy exposure to the world's second-largest economy, lost 0.7 percent, underperforming the benchmark Nikkei.

"The greatest concern for the market right now is how long this dispute could drag on," BNP Paribas' Okazawa said.

EARNINGS WORRIES

SmartEstimates from Thomson Reuters StarMine expects an average negative earnings surprise of 1.2 percent for this quarterly results reporting period, which will kick into high gear in two to three weeks.

However, the president of Murata Manufacturing Co Ltd 6891.OS said the precision machinery firm and supplier to Apple Inc (AAPL.O) could escape those headwinds thanks to strong demand from smartphone makers, and with its Chinese factories at full capacity. The stock advanced 1 percent.

The broader Topix index eased 0.5 percent to 727.39, with nearly 1.4 billion shares changing hands, up from Tuesday's 1.36 billion but down from last week's average of 1.6 billion.

Supermarket chain operator Uny Co Ltd (8270.T) slumped 11.2 percent after it cut its operating profit forecast for the year ending February 20, with its second-quarter figures coming in below market expectations.

Other decliners included Daiichi Sankyo Co Ltd (4568.T), which sank 5.4 percent to a record low after U.S. biotechnology company ArQule Inc (ARQL.O) said it will discontinue a late-stage trial of the lung cancer drug it is co-developing with Daiichi Sankyo after an interim analysis showed the drug would not improve overall survival.

(Additional reporting by Sophie Knight; Editing by Kim Coghill)

FILED UNDER:

"India's Daughter"

Reuters Showcase

Microfinance

Microfinance

Funding the unfunded: India helps small business borrow to grow  Full Article 

Insurance Sector

Insurance Sector

UK healthcare firm Bupa sees strong growth in India  Full Article 

Sensex Rises

Sensex Rises

Sensex edges up; consumer and healthcare stocks rise  Full Article 

Market Eye

Market Eye

FTSE adds nine Indian firms as large-caps in Asia-Pacific ex-Japan index   Full Article 

Indian Ocean Diplomacy

Indian Ocean Diplomacy

PM Modi to ramp up help for Indian Ocean nations to counter China influence  Full Article 

ECB Bond-Buying

ECB Bond-Buying

ECB raises growth forecasts, to start printing money next week  Full Article 

China Economy

China Economy

China signals "new normal" with lower annual growth target  Full Article 

Pharma Sector

Pharma Sector

Panel recommends waiving late-stage trials for some drugs  Full Article 

E-commerce

E-commerce

China backs e-commerce expansion in win for Alibaba, JD.com  Full Article 

Reuters India Mobile

Reuters India Mobile

Get the latest news on the go. Visit Reuters India on your mobile device  Full Coverage