News Column

Nikkei tumbles 3% in morning on Iraqi crisis

August 7, 2014

Satoshi Iizuka

Tokyo stocks fell sharply Friday morning, with the Nikkei hitting a two-month low, as investor sentiment was impaired by intensifying geopolitical risks including possible airstrikes on Iraq by the United States.

The 225-issue Nikkei Stock Average shed 455.49 points, or 2.99 percent, from Thursday to 14,776.88, after hitting a morning low of 14,753.84, its lowest intraday level since May 30. The broader Topix index of all First Section issues on the Tokyo Stock Exchange was down 31.28 points, or 2.49 percent, at 1,226.84.

The market was hit by massive selling from the outset of the morning session, following poor performances of U.S and major European shares the previous day due to concerns over Russia's retaliatory measures against economic sanctions imposed by the United States and Europe.

The yen's firmness against the U.S. dollar and the euro also cooled investor sentiment, said Takashi Hiroki, chief strategist at Monex Inc.

Investors' risk-averse mood intensified after U.S. President Barack Obama said he has authorized limited airstrikes in Iraq to prevent a "potential act of genocide" in midmorning Japan time, brokers said.

On the First Section, falling shares outnumbered rising ones by 1,629 to 131, while 57 ended the morning unchanged.

All sectors ended the morning session lower, led by nonferrous metal, precision machinery and consumer finance shares.

Export-oriented automakers and high-tech companies were battered by the firmer yen, leading the market's drop.

Honda Motor lost 105.50 yen, or 3.0 percent, to 3,399.50 yen, Mazda Motor dropped 105 yen, or 4.3 percent, to 2,344 yen and Sony declined 54.50 yen, or 3.1 percent, to 1,732.00 yen.

Nisshin Steel plunged 127 yen, or 10.1 percent, to 1,133 yen on its earnings report on Thursday that showed its group net profit in the April-June period plunged 99.3 percent year-on-year to 33 million yen.

Nikon tumbled 148 yen, or 9.3 percent, to 1,436 yen after the camera maker said Thursday its consolidated net profit for the current year through next March is likely to decrease 18.8 percent year-on-year to 38 billion yen.

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Source: Japan Economic Newswire

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