Japan Stocks Drop Most in Month as Europe Concern Flares; Panasonic Slides

Japan’s Nikkei 225 Stock Average fell the most in a month after Panasonic Corp. (6752) forecast its biggest loss in a decade and Greek Prime Minister George Papandreou put Europe’s debt agreement at risk with a promise to let voters decide whether they’ll take the deal.

Nissan Motor Co., which depends on Europe for 15 percent of its sales, slid 1.9 percent. Panasonic fell 5.1 percent after the electronics maker predicted a $5.3 billion loss amid falling television sales and restructuring costs. DeNA Co. tumbled by its daily limit after the website operator missed profit estimates. Fanuc Corp. (6954), a maker of industrial robots that counts Asia as its biggest market, declined 3.6 percent after a report showed China’s manufacturing expanded less than forecast.

The Nikkei 225 (NKY) Stock Average fell 1.7 percent to 8,835.52 at the 3 p.m. close in Tokyo, its steepest drop since Oct. 3. The broader Topix index sank 1.3 percent to 754.50. The gauge climbed 3.3 percent last week after Europe reached a debt deal that may now be in jeopardy.

“Papandreou’s comments poured cold water on agreements that Europe finally got into shape last week,” said Ayako Sera, a market strategist at Sumitomo Trust & Banking Co. in Tokyo, which manages the equivalent of $326 billion. “The Greek Prime Minister is thrusting responsibility onto the public. That sparked a lot of risk-off moves in the market.”

Debt, Slowdown

The Topix index sank 16 percent this year, amid concern Europe’s debt crisis and a slowdown in the U.S. would hamper Japan’s export-led recovery. The decline has cut the price of shares on the index to 0.89 times estimated book value, near the lowest since March 2009.

Futures on the Standard & Poor’s 500 Index slid 0.9 percent today. The index fell 2.5 percent yesterday in New York, extending losses in the final hour of trading after Papandreou said he will put Europe’s new agreement on financing for Greece to a popular vote. An opinion poll published Oct. 29 showed most Greeks believe Europe’s accord on a new bailout package and a debt writedown is negative.

Nissan declined 1.9 percent to 721 yen. Nippon Sheet Glass Co., which counts Europe as its biggest market, fell 1.7 percent to 169 yen.

Panasonic retreated 5.1 percent to 768 yen after forecasting its biggest loss in 10 years because of a stronger yen, declining sales and a one-time charge for restructuring its TV and chip businesses. The company, which plans to cut 17,000 jobs, had projected a 30 billion yen profit for the fiscal year.

DeNA Tumbles

DeNA, the gaming website operator that almost tripled its earnings last year, plunged on signs profit growth is slowing. Shares tumbled 20 percent to 2,725 yen after the company missed its net-income forecast for the first-half by 5.1 percent. JPMorgan Chase & Co. analyst Hiroshi Kamide cut his rating on the stock to “underweight” from “neutral.

“The biggest concern is that DeNA faced its first average-revenue-per-user drop since the company started providing social games,” Kamide said by phone today. “The hit rate of the business is falling.”

Other game-related shares also sank. Developer Konami Corp. (9766) tumbled 7.2 percent to 2,405 yen and KLab Inc., a provider of online social games, retreated 7.1 percent to 5,000 yen.

DeNA’s earnings report was a “negative surprise” that that indicated slower growth in Japan’s market for social gaming, Goldman Sachs Group Inc. wrote in a report dated yesterday.

Factory-robot maker Fanuc slid 3.6 percent to 12,460 yen after an index of Chinese manufacturing dropped to the lowest level since 2009. Hitachi Construction Machinery Co., which gets about 13 percent of its sales in the mainland, slid 2.9 percent to 1,496 yen. Rival Komatsu Ltd. (6301) fell 1.8 percent to 1,940 yen.

In China, a report today showed manufacturing slowed for the first time in three months. The Purchasing Managers’ Index fell to 50.4 from 51.2 in September, the China Federation of Logistics and Purchasing said in a statement today. The number was below the median economist estimate of 51.8. A reading above 50 indicates expansion.

To contact the reporter on this story: Kana Nishizawa in Hong Kong at knishizawa5@bloomberg.net.

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

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