Japan’s Topix Index Falls for Second Day on Steelmakers

Japanese stocks fell, with the Topix index retreating for a second day, as steelmakers and non-ferrous metal companies led losses among the gauge’s 33 groups. Tokyo Electron Ltd. soared 13 percent on a takeover deal.

Nippon Yakin Kogyo Co. slumped 16 percent to lead steelmakers lower. NTT Data Corp., which provides network services, plunged 7.8 percent after closing at a two-month high yesterday. Tokyo Electron climbed the most on the Nikkei 225 Stock Average after Applied Materials Inc., the largest chipmaking-equipment supplier, agreed to acquire the company for $9.39 billion in stock. Tokyo Broadcasting System Holdings Inc., a Tokyo Electron shareholder, gained 4.8 percent.

The Topix fell 0.3 percent to 1,211.15 at the close in Tokyo, with about five stocks dropping for every three that gained. Seven of the gauge’s subsectors climbed. The Nikkei 225 lost 0.8 percent to 14,620.53. The Topix rallied 2.8 percent last week after the U.S. Federal Reserve unexpectedly refrained from reducing stimulus.

“Investors are in wait-and-see mode after the market rose a lot last week,” said Masaaki Yamaguchi, equity market strategist at Nomura Holdings Inc., Japan’s biggest brokerage by market value. “There are mixed views on when the Fed’s tapering may start and that’s why investors are on the sidelines.”

The Topix has advanced 9.5 percent in September after falling for four months and is up 6.8 percent this quarter. The gauge has surged 41 percent for the year, making Japanese equities the best performers among developed markets.

Some 979 of the 1,749 companies in the Topix are scheduled to go ex-dividend tomorrow, meaning today was the last day investors buying the shares could secure a dividend in the next round of payments.

Fed Tapering

Futures on the Standard & Poor’s 500 Index slid 0.1 percent today. The measure fell 0.3 percent yesterday amid concerns over budget talks aimed at avoiding a government shutdown next week and as the Conference Board’s index of consumer confidence slumped in September to a four-month low.

The Federal Open Market Committee said after its Sept. 17-18 meeting that it wants more evidence of an economic recovery before paring its monthly asset purchases.

The Topix Iron & Steel Index slipped 2 percent, the most among the broader gauge’s industry groups. Nippon Yakin Kogyo, which produces stainless steel, plunged 16 percent to 333 yen after more than doubling from Sept. 9 through yesterday. Nisshin Steel Holdings Co. sank 6.7 percent to 1,287 yen after rising 7.2 percent yesterday.

NTT Data plunged 7.8 percent, the most since June 13, to 337,500 yen, after advancing or trading unchanged for the past five days and closing at its highest since July 26 yesterday. Volume today was almost four times the three-month average.

Olympics Stocks

Construction companies expected to benefit from Tokyo winning the hosting rights for the 2020 Olympics dropped today. Taisei Corp. lost 2.9 percent to 471 yen. Kajima Corp. decreased 2 percent to 395 yen. Both companies were cut to sell by Deutsche Bank AG.

Tokyo Electron, the No. 2 maker of chip-production machines, jumped 13 percent to 5,490 yen after the acquisition was announced. Gary Dickerson, chief executive officer of Applied Materials, is moving to consolidate the industry across continents amid slowing demand for equipment used to prepare silicon for chip fabrication. Dickerson will be CEO of the combined manufacturer and Tokyo Electron’s CEO Tetsuro Higashi will become chairman.

The new company is likely to expand market share, improve earnings through cost-cutting and buy back some of its shares, JPMorgan Chase & Co. analyst Hisashi Moriyama wrote in a note today. The price target on the stock was raised to 7,000 yen from 5,600 yen.

Tokyo Broadcasting System, which owns 4.3 percent of Tokyo Electron, advanced 4.8 percent to 1,374 yen.

Envipro Surges

Among other stocks that rose, Envipro Holdings Inc., a Shizuoka-based recycler of scrap metals and other industrial waste, jumped 26 percent from its initial public offering price to 881 yen on its trading debut on the second section of the Tokyo Stock Exchange.

“The business meets today’s needs and you can also expect a short-term improvement in earnings due to rising metal prices,” said Nobuyuki Fujimoto, a senior market analyst at SBI Securities Co. “Envipro is getting a tailwind after other shares debuted well recently.”

Nitto Denko Corp. surged 15 percent to 7,540 yen. The materials manufacturer will join the Nikkei 225 tomorrow. Tokyu Land Corp., which will be removed tomorrow, dropped 4.4 percent to 1,021 yen.

The Topix traded at 1.27 times book value today, compared with 2.50 for the S&P 500 and 1.76 for the Stoxx Europe 600 Index yesterday. The Japanese measure’s 30-day historic volatility was at 19.04 today, compared with its five-year median of 19.40.

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