Japanese stocks fell for a second day before a European summit today after the abrupt cancellation of a finance ministers’ meeting fueled concern leaders may not make headway on the debt crisis.
Nintendo Co. which depends on Europe for more than 40 percent of sales, lost 4.2 percent after a report the gamemaker will post a widening loss. Olympus Corp. (7733), the maker of optical equipment under fire for $687 million in adviser payments, dropped 7.6 percent after being placed on a watch list by the Tokyo Stock Exchange. TDK Corp. (6762), a manufacturer of electronic parts, surged 8.4 percent after Nomura Holdings Inc. recommended the shares.
The Nikkei 225 (NKY) Stock Average fell 0.2 percent to 8,748.47 at the 3 p.m. close in Tokyo. The broader Topix index declined 0.2 percent to 746.48. European leaders meet today in Brussels this week for the second time this week to hash out plans for expanding a regional rescue fund, recapitalizing the banks and deciding the size of bondholder writedowns on Greek debt.
“The market was hoping for something concrete to come out of Europe on the debt problem, but with the cancellation of the meeting, there’s a concern there may be disagreements among the leaders,” said Naoteru Teraoka, general manager at Tokyo-based Chuo Mitsui Asset Management Co., which oversees about $20 billion.
Futures on the Standard & Poor’s 500 Index rose 0.4 percent today. The index fell 2 percent yesterday in New York after European Union finance ministers canceled a meeting at the last minute. The question of how to recapitalize the banks can’t be decided before other parts of the rescue package, a person familiar with the matter said on condition of anonymity.
U.S. stocks extended losses yesterday after consumer confidence unexpectedly dropped to the lowest level since March 2009, when the economy was in a recession.
Nintendo slumped 4.2 percent to 11,180 yen. The pretax loss at the company may have widened to 100 billion yen ($1.32 billion) in the six months through September from 4.1 billion yen a year earlier, the Nikkei newspaper said, without saying where it got the information.
Olympus, which has lost more than half its market value amid a scandal involving payments to advisers, dropped 7.6 percent to 1,099 yen after being placed on margin-trading watch list by Japan’s biggest stock exchange.
Kao, TDK, Minebea
Kao Corp. (4452), Asia’s biggest cosmetics maker by market value, sank 4.5 percent to 2,030 yen as first-half profit missed its forecast and Nomura lowered its rating to “neutral” from “buy,” citing “severe” business conditions in Japan.
Losses on the Nikkei were limited after Chinese Premier Wen Jiabao yesterday said economic policy will be fine-tuned as needed, a statement that fueled speculation the government will ease constraints on lending. The statement “supports our view that China’s government is likely to relax credit controls” toward the end of the year, said Wang Qinwei, China economist at Capital Economics Ltd. in London.
“There’s increasing expectation that China will move away from its tightening policies, and that’s providing some boost to the market,” said Hiroaki Hiwada, a strategist at Tokyo-based Toyo Securities Co.
Fanuc Corp. (6954), a maker of industrial robots, which counts Asia as its biggest market, rose 2.9 percent to 12,510 yen. TDK, which gets almost a third of its revenue from China, jumped 8.4 percent to 3,310 yen.
TDK and Minebea Co. rose the most on the Nikkei after Nomura recommended the makers of parts used in hard-disk drives. TDK climbed 8.4 percent to 3,310 yen, while Minebea gained 5.9 percent to 286 yen.
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