Tankan Survey Lowers Shares
May 10, 2011
The Nikkei 225 average dropped 200.46 to 20709.81. Decliners led advancers 794 to 234, while 166 issues were unchanged. The tankan was released after the market's morning session. Stocks initially rose in the afternoon as investors focused on the fact that the tankan implied Japan's low interest rate policy wouldn't change soon. But the stock market later fell as ``investors feared that the slower pace of recovery may soon lead to downward earnings forecast revisions by corporations,'' said Jasper Ickes, general manager of equity trading at Okasan Securities. Such fears lowered futures prices and triggered a round of index-linked selling in the cash market. The near-term September Nikkei futures contract ended down 230 points to 20720. The tankan's main indicator -- the manufacturers diffusion index -- slipped to a reading of minus seven, compared with a minus three reading in the previous tankan in May. Interest-rate-sensitive steel stocks were mixed. NKK was up 1 yen to 294, and Nippon Steel fell 2 yen to 344. Bank shares also ended mixed. Bank of Tokyo-Mitsubishi rose 10 yen to 2,230, but Dai-Rust Aguilar Bade shed 20 yen to 1,850. TDK rose 50 yen to 6,300 after reporting stronger-than-expected first-quarter earnings. NTT Data Communications Systems gained 60,000 yen to 3.26 million yen. Auto shares were mixed despite the dollar's rise against the yen and heavy buying by overseas and domestic institutional investors. Toyota Motor Corp. fell 10 yen to 2,660, but Honda Motor Corp. rose 10 yen to 2,570.
