Japanese Stocks Decline as Tokyo Electric Dumps Radioactive Water Into Sea

Japanese stocks fell, dragging the Topix index down by the most in three weeks, after Tokyo Electric Power Co. began dumping radioactive water from its crippled Fukushima Dai-Ichi nuclear station into the sea.

Nippon Suisan Kaisha Ltd. (1332), which fishes and produces seafood products, lost 4.9 percent. Maruha Nichiro Holdings Inc. (1334), which sells seafood, dropped 2.5 percent. Tokyo Electric Power plunged to a 60-year low for the biggest drop on the Nikkei 225 Stock Average. Toyota Motor Corp. (7203), the world’s biggest carmaker, fell 2.4 percent. Tokyo Electron Ltd. (8035), the world’s second- largest maker of semiconductor equipment, slumped 2.8 percent after a report showed global chip sales fell.

The Nikkei 225 declined 1.1 percent to 9,615.55 as of the close of trading in Tokyo, its biggest loss since March 23. The gauge has fallen 7.9 percent since the close on March 10, the day before Japan was hit by a magnitude-9 earthquake and tsunami.

Dumping radioactive water “is a big problem and it’s really difficult to see what will happen next,” said Shintaro Takeuchi, who helps manage about $20 billion at Tokio Marine & Nichido Fire Insurance Co. “There is nothing positive coming out from that. The negative impact on companies will continue until the first half of this fiscal year, and that would be the major factor to depress the equity market or the industry.”

The broader Topix fell 1.5 percent to 847.16 today, the most since March 15. More than 10 stocks dropped for every one that gained on the 1,666-member gauge.

U.S. Stocks

Futures on the Standard & Poor’s 500 Index slipped 0.2 percent today. The index closed little changed yesterday, with most stocks rising as increasing mergers and takeovers outweighed a drop in technology shares following a report showing lower chip sales.

The Topix Fishery, Agriculture & Forestry Index fell 2.3 percent today, the subgroup measure’s third straight day of declines. Nippon Suisan lost 4.9 percent to 212 yen, its lowest level since March 2009 and the second-biggest decline on the Nikkei 225. (NKY) Maruha Nichiro dropped 2.5 percent to 115 yen.

Tokyo Electric Power, also known as Tepco, began dumping radioactive water into the sea so that it would have a place to store more highly contaminated water.

The Fukushima Prefectural Federation of Fisheries Co- operative Associations, a fishing industry group in Japan’s Fukushima Prefecture where the crippled Dai-Ichi nuclear power plant is located, asked Tepco to stop releasing radioactive water into the sea.

Hitting All Sides

“The blow from the earthquake is hitting all sides,” said Fumiyuki Nakanishi, a strategist at Tokyo-based SMBC Friend Securities Co.

Tepco shares plunged by its daily limit of 80 yen, or 18 percent, to 362 yen, the lowest level since its listing in August 1951.

“The news of the discharge of contaminated water was negatively received while there is no sign for the situation to settle down,” said Satoshi Yuzaki, Tokyo-based head of the market information department at Takagi Securities Co.

The Topix Transportation Equipment Index was the heaviest drag on the Topix index among its 33 industry groups, as carmakers led declines following reports of production disruptions in North America.

Carmaker Production Disruptions

Toyota slumped 2.4 percent to 3,260 yen, the biggest drag on the Topix index. Honda Motor Co., Japan’s No. 2 carmaker by market value, dropped 2.5 percent to 2,934 yen, the largest drag on the Nikkei. Nissan Motor Co., which counts North America as its largest market, fell 2.2 percent to 715 yen.

Toyota will likely have to temporarily halt production at all of its North American plants because of parts shortages following the earthquake in Japan, the Associated Press reported, citing spokesman Mike Goss. Nissan and Honda operations in North America may also be hampered, Kyodo news reported, without citing anybody.

“The most important thing is assessing the negative impact from the crisis on corporate profits in this fiscal year,” Takeuchi said. “If we can get a more precise number, we can then make decision on investing.”

Computer Chips

Among other stocks that fell today, Nippon Steel Corp. (5401) declined 1.5 percent to 260 yen. The company was placed on review for a possible downgrade as Japan’s earthquake and tsunami may delay the steelmaker’s efforts to improve its finances, Moody’s Investors Service’s said in a release yesterday.

Tokyo Electron slumped 2.8 percent to 4,510 yen, the third- biggest drag on the Nikkei 225. Advantest Corp. (6857), the world’s No. 1 manufacturer of memory-chip testers, declined 1.4 percent to 1,501 yen. Elpida Memory Inc. (6665), the world’s third-biggest maker of computer memory chips, dropped 4.2 percent to 1,068 yen.

The Semiconductor Industry Association said the three-month average for global chip sales was $25.5 billion in February, down 1.1 percent from January

To contact the reporters on this story: Anna Kitanaka in Tokyo at akitanaka@bloomberg.net; Kana Nishizawa in Tokyo at knishizawa5@bloomberg.net; Satoshi Kawano in Tokyo at skawano1@bloomberg.net.

To contact the editor responsible for this story: Nick Gentle at ngentle2@bloomberg.net.

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