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Topix Falls for Fourth Day as Asahi Glass, Shiseido Stoke Earnings Concern

Japanese stocks fell, sending the Topix index to its longest losing streak in more than two months, on concern that earnings growth will slow.

Asahi Glass Co., Japan’s biggest glassmaker, tumbled 4.2 percent after the Nikkei newspaper said profit growth slowed. Toho Titanium Co., a titanium smelter, plunged 5.5 percent after the company widened its net-loss forecast. Shiseido Co., the nation’s largest cosmetics maker, lost 1.7 percent after cutting its profit outlook. Canon Inc., the world’s No. 1 maker of cameras, jumped 3.7 percent after boosting its earnings forecast.

“The market lacks confidence that strong earnings in the first half will continue into the second half,” said Junichi Misawa, head of equity investment at Tokyo-based STB Asset Management Co., which oversees about $14 billion.

The Nikkei 225 Stock Average fell 0.2 percent to 9,366.03 at the 3 p.m. market close in Tokyo. The gauge moved within a range of 63.24 points today, the narrowest since Aug. 9. The broader Topix dropped 0.4 percent to 814.33, with more than twice as many stocks retreating as advancing. Its four-day losing streak was the longest since the period ended Aug. 12.

The gauges briefly rose about 1:34 p.m. after the Bank of Japan said it will buy corporate debt with lower credit ratings than it accepted before, and that policy makers will meet again on Nov. 4-5, more than a week sooner than scheduled. The session will follow a meeting by the U.S. Federal Reserve on Nov. 2-3.

Further Easing Hopes

Advancing the meeting “boosted expectations that the BOJ may move to further easing,” said Tsuyoshi Kawada, senior strategist at Nikko Cordial Securities Inc.

The Nikkei 225 has decreased 11 percent this year, the most among the world’s 40 largest equity markets. Shares in the gauge trade at 16.3 times estimated earnings on average, the lowest level in three weeks. The measure is little changed this month.

Asahi Glass tumbled 4.2 percent to 781 yen. Operating profit in the July-September quarter increased 70 percent year on year, the Nikkei newspaper said. That’s less than one-fifth the pace of increase of the previous quarter.

Taiheiyo Cement Corp., which is in the same industry group as Asahi Glass in the Topix, slumped 4.3 percent, the biggest drop in the Nikkei 225, followed by Asahi Glass.

Toho Titanium plunged 5.5 percent to 2,106 yen, the steepest drop since June 25. The company widened its full-year net loss projection to 5.6 billion yen ($68.8 million) from 4.5 billion yen, citing the stronger yen. Shiseido retreated 1.7 percent to 1,734 yen as the company cut its full-year net income forecast by 14 percent because of losses on securities holdings.

Canon, Fanuc Climb

Canon climbed 3.7 percent to 3,755 yen and was the most- active stock by value traded in Japan today, followed by Fanuc Ltd. Canon raised its full-year net income forecast 2.1 percent to 245 billion yen, citing cost cuts and higher camera shipments.

“Companies boosting full-year profit forecasts will likely rise, but we can’t expect that to be strong enough to boost the whole market,” said Takashi Ushio, head of investment at Marusan Securities Co. in Tokyo. “A lot of companies are maintaining their full-year outlook because they are concerned about currency impact.”

Fanuc, Japan’s No. 1 maker of industrial robots, surged 5.5 percent to 11,850 yen, extending yesterday’s gain, after saying its first-half net income jumped sixfold. Fanuc rose the most in the Nikkei 225. Fujitsu Ltd., Central Japan Railway Co. and Kuraray Co. climbed more than 2.5 percent after reporting profits that exceeded their forecasts.

Earnings Peak

Tomorrow is the peak day for earnings reports in Japan, with about 270 of the 1,662 companies in the Topix scheduled to report results, according to data compiled by Bloomberg.

About three companies have exceeded profit estimates for every two that fell short, based on data compiled by Bloomberg from the 237 companies in the Topix that have reported quarterly results since Oct. 7.

All 11 companies in the Topix Pulp & Paper Index declined after Hiroyuki Okaseri, an analyst at Nikko Cordial Securities Inc., started coverage of the Japanese paper industry with an investment rating of “bearish.” Oji Paper Co., the nation’s biggest paper maker by market value, fell 0.8 percent. Nippon Paper Group Inc., the second-largest, retreated 2 percent. Mitsubishi Paper Mills Ltd. lost 1.2 percent.

The Bank of Japan today maintained a 5 trillion-yen asset buying program, announced at its previous monetary-policy meeting on Oct. 5, and said the fund will purchase 1.5 trillion yen of government debt, 450 billion yen in exchange-traded funds and 50 billion yen of real-estate-investment trusts.

To contact the reporter for this story: Akiko Ikeda in Tokyo at iakiko@bloomberg.net.

To contact the editor responsible for this story: Darren Boey at dboey@bloomberg.net.

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