Topix Halts Seven-Day Rally on Consumer Lenders, Insurers

Japan’s Topix index fell, halting a seven-day advance, as consumer lenders and insurers declined.

Anicom Holdings Inc. sank 5.3 percent as the Topix Insurance Index slid to a one-week low. Cosmo Oil Co. fell 2.5 percent after Mitsubishi UFJ Morgan Stanley Securities Co. downgraded the refiner’s shares. Aiful Corp. lost 3.6 percent, extending its drop to 19 percent since reporting on Aug. 13 that quarterly profit plunged. Hitachi Metals Ltd. added 3.2 percent after saying it will buy Wisconsin-based Waupaca Foundry Inc.

The Topix fell 0.1 percent to 1,279.64 at the close in Tokyo after rising as much as 0.3 percent. The Nikkei 225 Stock Average was little changed at 15,454.45. Shares rose earlier after U.S. data showed inflation remain subdued and home construction rebounded.

“The market is due for a correction after rising seven straight days,” said Ichiro Yamada, general manager of equities at Fukoku Mutual Life Insurance. “U.S. economic data are regaining strength. The housing sector isn’t bad or showing signs of overheating. That’s good for the market.”

The Topix rebounded 13 percent from this year’s low on April 14 amid optimism about the global economy and speculation Japan’s $1.2 trillion Government Pension Investment Fund will buy more domestic shares. The Topix traded at 1.2 times book value today, compared with 2.7 for the Standard & Poor’s 500 Index and 1.8 for the Stoxx Europe 600 Index yesterday

Trade Data

Japan’s exports rose more than than estimated in July and imports unexpectedly increased, a report showed today.

Futures on the S&P 500 slid less than 0.1 percent today after the equity measure climbed 0.5 percent yesterday. Apple Inc. jumped 1.4 percent to close at an all-time high as investors look ahead to new products such as bigger-screen iPhones and a wristwatch-like device that may jump-start revenue growth.

A report yesterday showed the U.S. cost of living climbed in July at the slowest pace in five months, indicating price pressures remain limited even as the economy picks up. Limited inflation pressures allow the Federal Reserve to keep interest rates low. Housing starts surged in July to the highest level in eight months, underscoring the recent pickup in builder optimism as the U.S. residential real-estate market gains some traction.

Minutes of the Fed’s last meeting are released today and Chair Janet Yellen will speak to global central bankers later this week at their annual gathering in Jackson Hole, Wyoming, as investors consider the outlook for U.S. interest rates.

Topix gauges tracking consumer lenders and insurers fell the most among the 33 industry groups on the larger measure. Aiful lost 3.6 percent to 427 yen and Anicom sank 5.3 percent to 1,157 yen.

Hitachi Metals

Hitachi Metals advanced 3.2 percent to 1,790 yen after announcing plans to pay $1.3 billion for Waupaca Foundry, the largest-ever purchase for the Japanese specialty metals producer. The acquisition from KPS Capital Partners LP will be financed with cash and debt, according to a statement yesterday.

Cosmo Oil fell 2.5 percent to 194 yen after its rating was cut to neutral from outperform by Mitsubishi UFJ Morgan Stanley. The 12-month price target is 120 yen per share.

Skymark Airlines Inc. retreated 6.5 percent to 215 yen after surging 28 percent yesterday as AirAsia Bhd was said to be considering a bid for the carrier. Tony Fernandes, AirAsia’s group chief executive officer, denied the possibility.

ABC-Mart Inc. advanced 3.1 percent to 5,620 yen after the footwear retailer raised its planned full-year dividend to 80 yen from 60 yen.

Sumitomo Electric Industries Ltd. fell 0.5 percent to 1,521.5 yen after China found a dozen Japanese auto-parts makers guilty of price fixing and issued 1.24 billion yuan ($202 million) in antitrust fines. The company drew the heaviest fine at 290.4 million yuan, the biggest-ever antitrust penalty for a single company.

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