Japan’s Topix Heads for Third Day of Losses on Brokerages

Japanese stocks fell, with the Topix index (TPX) capping a third day of declines, as shares of brokerages and exporters retreated.

Nomura Holdings Inc. (8604), Japan’s biggest securities company, sank 2.5 percent in a second day of losses. Toyota Motor Corp., which gets about three-quarters of revenue overseas, slid 1.1 percent. Nisshin Steel Co. gained 1.9 percent after its price target was raised at Jefferies Group LLC. Bridgestone Corp., Asia’s largest tiremaker, climbed 1.6 percent after data showed sales of tires for new vehicles rose in Japan.

The Topix slid 0.4 percent to 1,270.82 at the close in Tokyo, with all but eight of 33 industry groups retreating. The Nikkei 225 Stock Average sank 0.1 percent to 15,302.65. The yen held at 101.60 per dollar after three days of gains.

“There’s a hint of nervousness ahead of earnings season,” said Stuart Beavis, head of institutional equity derivatives at Vantage Capital Markets in Hong Kong. “Investors want proof now that the U.S. economy is picking up in the second half, and we need a catalyst to move higher given the all-time highs.”

Futures on the Standard & Poor’s 500 Index were little changed today. The measure fell 0.7 percent yesterday, and the Nasdaq Composite Index declined the most in two months, as Raymond James & Associates said equities are vulnerable to losses and Citigroup Inc. cited investor concern for a “severe” pullback.

Brokers Slide

“We’re now in a void for a few weeks in Japan until earnings come out,” said Gavin Parry, managing director of Hong Kong-based brokerage Parry International Trading Ltd.

The Topix Securities & Commodity Futures Index lost 2 percent, the most among the broader gauge’s industry groups. Nomura sank 2.5 percent to 698 yen. Daiwa Securities Group Inc., Japan’s second-biggest brokerage, lost 1.5 percent to 869 yen.

Exporters dropped. Toyota slid 1.1 percent to 6,062 yen for the biggest drag on the Topix. Panasonic Corp., which gets about half of sales overseas, fell 1.1 percent to 1,227 yen.

Shippers retreated after the Baltic Dry Index, a measure of commodity freight rates, fell 0.8 percent yesterday. Nippon Yusen K.K., the largest company in the sector, dropped 1 percent to 294 yen. Mitsui OSK Lines Ltd., the No. 2, slid 1.3 percent to 378 yen. Kawasaki Kisen Kaisha Ltd. slipped 0.9 percent to 219 yen.

Nisshin Steel advanced 1.9 percent to 1,356 yen. Jefferies, which maintained its buy rating on the company, boosted its share price target to 1,650 yen from 1,400 yen.

Tire Sales

Bridgestone advanced 1.6 percent to 3,720 yen. New vehicle tire sales rose 4.5 percent in June compared with the previous year, according to the Japan Automobile Tyre Manufacturers Association.

The Topix has climbed 11 percent from a May 21 low, paring its drop for the year to 2.4 percent. The gauge traded at 1.2 times book value today, compared with 2.7 for the Standard & Poor’s 500 Index and 1.9 for the Stoxx Europe 600 Index yesterday. Volume on the Topix was 3.4 percent below the 30-day average today.

“There is going to be selling pressure,” said Hiroichi Nishi, an equities manager at SMBC Nikko Securities Inc. “Some stocks still look overbought.”

To contact the reporter on this story: Anna Kitanaka in Tokyo at akitanaka@bloomberg.net

To contact the editors responsible for this story: Sarah McDonald at smcdonald23@bloomberg.net Tom Redmond, John McCluskey

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