Nikkei falls for 7th day, longest losing run in 7 months

Tue Nov 13, 2012 12:11pm IST

Related Topics

* Nikkei slips 0.2 pct, Topix ends flat
    * Hitachi Cable jumps 18.7 pct, to merge with Hitachi Metals

    By Dominic Lau
    TOKYO, Nov 13 (Reuters) - Japan's Nikkei average fell for a
seventh straight session on Tuesday, its longest losing streak
in seven months, on fears that the U.S. fiscal problem may tip
the world's largest economy into recession.
    Adding to the concerns, the euro zone and the International
Monetary Fund were at odds over a longer-term plan to reduce
Greece's debt, preventing disbursement of immediate aid to
Athens.
    Exporters, whose fortunes are largely tied to the health of
the global economy, suffered, with Toshiba Corp, Nikon
Corp, Canon Inc and construction machinery
maker Komatsu Ltd down between 0.5 and 2.2 percent.
    A stronger yen also added to the pressure on exporters, with
the Japanese currency trading at 79.28 to the dollar, not far
from a three-week high of 79.07 hit on Friday. The yen also
touched a five-week high 100.42 yen to the euro on Tuesday. 
    The Nikkei slipped 0.2 percent to 8,661.05 points,
hitting a four-week closing low for the third day in a row. It
has lost 4.3 percent during its longest daily losing streak
since April.  
    The benchmark is still up 2.4 percent so far this year but
lags behind a 9.7 percent rise in the U.S. S&P 500 and a
10.2 percent gain in the pan-European STOXX Europe 600.
    Gains in a number of machinery makers on short-covering and
a near 6 percent jump in Olympus Corp after it reported
first-half earnings offered some support to the market.
    A trader at a foreign bank said investors remained focused
on the negative impact of the so-called 'fiscal cliff' in the
United States, a series of spending cuts and tax increases that
will take effect in the new year.
    "Rising taxes in principle is a drag on growth ... People
here still are looking at the negatives more than the positives.
It's very hard to get a positive vibe into the market," he said.
    "We are again moving away from the 80 (yen to the dollar)
handle. Again, it's very negative for exporters ... a lot of
profit taking in exporters."
    The trader added company quarterly earnings had also been
weak, giving investors few reason to take any big positions.
    About 58 of the 145 Nikkei companies that have so far
reported quarterly earnings undershot market expectations, data
from Thomson Reuters StarMine showed. That compared with 54
percent in the previous quarter.
    
    WEAK EARNINGS SEASON
    Many companies have also cut their earnings outlooks amid
sluggish global growth. Among them were general contractor
Shimizu Corp, which shed 5.4 percent on Tuesday.
    Engineering firm JGC Corp lost 2.3 percent after it
reported its first-half earnings, which a dealer described as
"light".
    But Olympus climbed as its key endoscope business rebounded
in North America in September and its full-year earnings cut was
in line with market expectations.
    The broader Topix was flat at 722.56 in relatively
light trade, with 1.5 billion shares changing hands, down from
last week's average of 1.59 billion but up from a 10-week low of
1.26 billion shares reached on Monday.
    "There are signs that the U.S. economy is recovering, and if
upcoming U.S. data gives hope to the market we may see more
rises as the underlying worries are whether the U.S. economy is
recovering or not," said Takashi Ito, equity market strategist
at Nomura Securities.
    Hitachi Cable Ltd was also in demand, surging 18.7
percent to a near three-month closing high after the company,
which the Nikkei newspaper said is bracing for the fifth
consecutive year of net losses, and Hitachi Metals Ltd 
said they will merge in April.
    Hitachi Metals shed 8.2 percent, while Hitachi Ltd,
the parent of the both Hitachi Cable and Hitachi Metals, added
0.5 percent.
FILED UNDER:
Comments (0)
This discussion is now closed. We welcome comments on our articles for a limited period after their publication.

  • Most Popular
  • Most Shared

Pharma

REUTERS SHOWCASE

Modi's U.S. Trip

Modi's U.S. Trip

PM Modi to get rock star reception in New York.  Full Article 

Northeast Floods

Northeast Floods

Landslides and floods kill 22 in northeast India.  Full Article 

Food Subsidy

Food Subsidy

India has no plans to increase food handouts - Food Minister Ram Vilas Paswan.  Full Article 

Importing Iron Ore

Importing Iron Ore

JSW Steel to import 10 mln T of iron ore due to local shortage.  Full Article 

Mars Mission

Mars Mission

India's Mars mission a step closer to success with engine test  Full Article 

Bumper Sales

Bumper Sales

Apple sells more than 10 mln new iPhones in first three days  Full Article 

Reuters India Mobile

Reuters India Mobile

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