Japanese Stocks Decline on Low Volume After China Growth Data

  • Chinese economy expands 6.9%, stays close to government target
  • Topix index trading volume about 20% below 30-day average

Japanese stocks fell for the first time in three days, amid low trading volumes, as steelmakers and tire manufacturers declined and data showed China’s economy grew at the slowest quarterly pace since 2009.

Sumitomo Mitsui Construction Co. and Asahi Kasei Corp. both retreated more than 6 percent, extending slumps from last week, as the Nikkei newspaper reported the firms may be punished for violating building laws. Sanken Electric Co. tumbled the most on the Topix index after Mitsubishi UFJ Morgan Stanley Securities Co. cut its recommendations on the shares. Nippon Soda Co. surged the most on the Nikkei 225 Stock Average after Nomura Holdings Inc., the country’s largest brokerage, advised buying shares of the chemicals manufacturer.

The Topix slipped 0.7 percent to 1,494.75 at the close in Tokyo, with about two shares falling for each that rose. Volume was about 20 percent lower than the 30-day average. The Nikkei 225 lost 0.9 percent to 18,131.23, with more than one fifth fewer shares changing hands.

“Chinese growth numbers are coming down -- that trend will not stop,” said Hartmut Issel, Singapore-based chief investment officer for UBS AG’s wealth management unit. “What we’re seeing is merely a stabilization on the fixed-investment side.”

China GDP

Chinese gross domestic product rose 6.9 percent in the three months through September from a year earlier, the National Bureau of Statistics said Monday, beating economists’ estimates for 6.8 percent. Still, that was the slowest quarterly expansion since the first three months of 2009.

China’s government has cut interest rates five times since November and boosted infrastructure spending in recent months to keep growth from sliding too far below this year’s target for about 7 percent.

Fixed-asset investment climbed 10.3 percent in the first nine months from the same period last year, compared to a median projection of a 10.8 percent increase. That’s the slowest pace of gains since 2000.

Stocks around the world have been rallying throughout October, restoring more than $4 trillion to the value of the global equity market. That came after last quarter’s volatility triggered by China’s surprise decision in August to devalue the yuan. The Topix index is up 5.9 percent in October, heading for its biggest monthly gain since February.

Building Probe

The Land Ministry is considering punishment for Sumitomo Mitsui and Asahi Kasei for possible violation of building laws, the Nikkei reported, citing an unidentified ministry official. Sumitomo Mitsui is investigating an apartment building in Yokohama, which is the subject of allegations that it was constructed based on falsified data. Sumitomo Mitsui fell 6.9, extending last week’s 18 percent drop. Asahi Kasei lost 8.5 percent, after it dropped 14 percent last week.

Sanken Electric tumbled 9.9 percent. Mitsubishi UFJ Morgan Stanley cut its rating to hold from buy and slashed its share-price target by 55 percent, citing slower earnings growth.

Nippon Soda rose 14 percent as Nomura raised its recommendation to buy from neutral, citing a strong contribution to earnings from Novus, its U.S. affiliate.

Before it's here, it's on the Bloomberg Terminal.