News Column

Japanese Market Falters After Positive Start

June 29, 2014

TOKYO (dpa-AFX) - The Japanese stock market opened marginally higher on Monday, tracking a positive lead from Wall Street. However, profit taking and data showing a smaller than expected rise in Japanese industrial output have dragged the market down into negative territory. A slightly stronger yen is contributing as well to the decline.

While shares from precision instruments, paper and agriculture sections edged higher, those from mining and marine transport space opened on a weak note.

The benchmark Nikkei 225 index is down 12.7 points or 0.1 percent at 15,082.3, after having advanced to 15,177.9 earlier.

Tokai Carbon is declining 2.7 percent. Kansai Electric Power, Mazda Motor, Sumitomo Mitsui Trust Holdings, Tokyo Tatemono, Nomura Holdings, Shiseido Co., Sumitomo Electric Industries, Suzuki Motor, Hino Motors, Chubu Electric Power and Nippon Yusen KK are down 1 to 2 percent.

Takashimaya Co. shares are down 0.5 percent. On Friday, the company reported a consolidated net profit of 4.5 billion yen for the quarter ended May, up 13 percent on the year.

Among the gainers, Minebea Co., Tokuyama Corp. and Nisshin Steel are moving up 4 to 5 percent and Nippon Electric Glass is rising 3.2 percent. Yokogawa Electric Corp., Asahi Group Holdings, Sumco Corp., Credit Saison, Sapporo Holdings and Tokyo Gas are up 1.3 to 2.3 percent.

Nippon Paper Industries Co. shares are up 1.2 percent on reports the company's first-quarter operating profit may see a sharp 60 percent rise.

On the economic front, industrial output in Japan was up a seasonally adjusted 0.5 percent on month in May, the Ministry of Economy, Trade and Industry said on Monday. That was shy of forecasts for an increase of 0.9 percent following the 2.8 percent contraction in April.

On a yearly basis, industrial production gained 0.8 percent - also below expectations for a gain of 1.5 percent and down from 3.8 percent in the previous month.

Upon release of the data, the METI maintained its assessment of industrial production, saying that it appears to be flat.

In the currency market, the U.S. dollar traded in the lower 101 yen range in early deals in Tokyo. The yen is currently trading at 101.29 to the U.S. dollar, against Friday's close of 101.43 yen per dollar.

Among other markets in the Asia-Pacific region, Shanghai, Hong Kong, South Korea and Taiwan are trading notably higher. New Zealand, Malaysia and Indonesia are up marginally, while Singapore and Australia are trading weak.

On Wall Street, stocks ended marginally higher on Friday, recovering from early weakness. Uncertainty about the near term outlook for the markets following recent gains rendered the market a bit sluggish. A report from Thomson Reuters University that showed an improvement in consumer sentiment in the month of June aided stocks to an extent.

The Dow ended up 5.7 points or less than 0.1% to 16,851.8. The Nasdaq advanced 18.9 points or 0.4% to 4,397.9, while the S&P 500 added 3.7 points or 0.2% to close at 1,961.0.

Major European markets ended mixed on Friday. While Germany and the U.K. markets posted modest gains, France ended weak.

U.S. crude oil ended lower for a second straight session on Friday, as worries over Iraqi oil shipments eased with the country's parliament scheduled to meet on Tuesday to discuss the process of forming a new government.

Crude oil futures for August ended down $0.10 or 0.1 percent at $105.74 a barrel on the New York Mercantile Exchange.

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Source: dpa-AFX International Compact

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