Japanese Stocks Decline After EU Finance Chiefs Hold Back Greek Bailout
Japanese stocks declined, sending the Nikkei 225 (NKY) Stock Average Down for a second day, as European finance ministers withheld a bailout for Greece, putting lawmakers in Athens under pressure to endorse a newly crafted austerity plan or exit the euro.
Nintendo Co. (7974), a maker of video-game consoles that gets 34 percent of its sales in Europe, slid 0.7 percent. Komatsu Ltd. (6301), a construction machinery maker that generates 23 percent of its sales in China, fell 2.2 percent as a report showed mainland exports declined for the first time in more than two years. Nippon Yusen K.K. (9101) and Mitsui O.S.K. Lines Ltd. (9104) led shippers higher after JPMorgan Chase & Co. lifted their ratings.
The Nikkei 225 Stock Average fell 0.6 percent to 8,947.17 at the 3 p.m. close of trading in Tokyo. The broader Topix (TPX) Index lost 0.7 percent to 779.07, rising 2.4 percent on the week as some of the nation’s biggest companies including Toyota Motor Co. and Japan Tobacco Inc. raised forecasts.
“Greece reached some sort of agreement, but it’s still up for negotiation whether the rest of the European authorities will accept that agreement,” said Stephen Halmarick, Sydney- based head of investment markets research at Colonial First State Global Asset Management, which oversees about $150 billion. “It was a positive step last night, but only a small one and there’s a long way to go.”
Futures on the Standard & Poor’s 500 Index fell 0.4 percent today. The gauge rose 0.2 percent in New York yesterday after Labor Department figures showed applications for jobless benefits fell 15,000 last week to 358,000.
European finance chiefs’ refusal to deliver the bailout reflects frustration with Greece’s bickering politicians and the prospect that they may again backtrack on austerity measures not yet passed into law. Prime Minister Lucas Papademos yesterday agreed with political parties on budget cuts required for the 130-billion-euro ($172) financing package. The deal has yet to be voted on.
“In short: no disbursement without implementation,” Luxembourg Prime Minister Jean-Claude Juncker said in Brussels late yesterday after chairing emergency talks of euro-area policy makers. He set another extraordinary meeting for Feb. 15.
Komatsu dropped 2.2 percent to 2,127 yen as a report showed China’s exports fell 15.3 percent in January while imports slide 0.5 percent last month from a year earlier. The nation’s inflation unexpectedly climbed 4.5 percent last month, damping prospects for the central bank to ease lending.
“The key is whether there’s going to be a slowdown in that economy and whether the authorities will respond to that,” Colonial First State’s Halmarick said. “Yesterday the inflation number in China was clearly a little bit on the high side, but most people accepted that was due to temporary factors” during the holidays.
Lenders fell on expectations the Bank of Japan will refrain from additional monetary easing on Feb. 14 because of signs of strength in the global economy and the boost from reconstruction after March’s disasters, according to economists surveyed by Bloomberg News.
Mitsubishi UFJ Financial Group Inc. (8306), Japan’s biggest lender, slid 2.8 percent to 385 yen. Sumitomo Mitsui Financial Group Inc. (8316), the second-largest bank by market value, fell 2.4 percent to 2,544 yen.
Japan’s two biggest shipping companies by sales gained after JPMorgan boosted the equity ratings to “overweight” from “neutral.”
Nippon Yusen gained 1.3 percent to 229 yen and Mitsui O.S.K. advanced 1.2 percent to 339 yen. Shippers also got a boost after the Baltic Dry Index (BDIY), a gauge of cargo rates, advanced 2.8 percent yesterday, rising for a fourth day.
The Topix’s shipping lines industry group trades at 0.66 times book value, compared with 0.95 times for the broader index. A number below 1 means that companies can be bought for less than the value of their assets.
The Topix (TPX) has risen 6.9 percent this year amid optimism the U.S. economy is weathering the European debt crisis and central banks will relax monetary policy to spur growth. Of the 1,290 companies in the index that have reported earnings since Jan. 9, 241 missed analysts’ estimates while 119 beat them, according to data compiled by Bloomberg.
The Nikkei 225 Volatility Index rose 0.5 percent to 21.01, indicating traders expect a swing of about 6 percent on the benchmark gauge over the next 30 days.
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