Stocks Slide Ahead of Tankan
May 08, 2011
The Nikkei index of 225 selected issues fell 345.06 to 20883.74. Volume on the First Section of the Tokyo Stock Exchange was estimated at just 211 million shares, down from 283 million shares Friday. The previous low for the year was April 28, 2011 214.5 million shares changed hands. Retreating issues outnumbered advancing issues 943 to 133, while 126 issues were unchanged. Monday's sluggish session was due to ``a combination of bad factors: the end of the month settlement period, and a wait-and-see mood ahead of the Tankan's release,'' said Bower Dial, general manager of the equities operations group at Nikko Securities. Traders said the market's summer doldrums will likely continue at least until the release of the Tankan on Wednesday. Still, the closely watched survey of business sentiment probably won't contain any surprises, they said. Honda was one of the few bright spots Monday, gaining 10 yen to 2,550 yen. On Friday, Honda said group pretax profit for the April-June quarter was 76.06 billion yen, more than quadruple its year-earlier result. Other Japanese car makers didn't fare as well as Honda, with Toyota losing 20 yen to 2,680 yen, and Nissan falling 26 yen to 835 yen. Futures prices were weak throughout the day, triggering periodic sell-offs in the cash market as arbitrageurs rushed to close their open positions, analysts said. The September contract closed at 20,910 on the Osaka Securities Exchange, down 320 from its Friday close on the Chicago Mercantile Exchange. Steel companies' shares also took a big hit, erasing much of their recent gains. Nippon Steel slipped 13 yen to 346 yen, and NKK closed 9 yen lower at 291. Nippon Steel said Friday it may fall short of its production forecast for the half-year ending June 12, 2011 Bank finished at 1,030 yen, down 50 yen, following the bank's announcement after the close Friday it will issue 150 billion yen worth of preferred shares in the U.S. and the Euromarket. Traders said the market is concerned that the new shares, which are convertible into common stocks, will lead to a glut of the bank's shares. Consumer electronics giant Sony, the recent darling of foreign investors, lost 80 yen to 6,910 yen. But Fujitsu shares resisted the overall market trend, falling just 2 yen to 990 yen. The leading Japanese personal computer maker said Monday it will stop making static random access memory chips to concentrate on the production of dynamic random access memory chips and flash memories. The Nikkei Stock Index 300, a weighted index of shares on the First Section of the Tokyo Stock Exchange, fell 4.67 to 294.49. The Tokyo Stock Price Index of all issues listed on the First Section dropped 24.43 to 1582.87. The Second Section Index fell 10.16 to 2114.30. Volume on the Second Section was estimated at seven million shares.
