Japanese stocks paced broad-based losses in Asia Wednesday, as exporters such as Nikon Corp. got hit by a strengthened yen while banking giant Mitsubishi UFJ Financial Group slumped on a report that it will cut its profit forecast.
The benchmark Nikkei 225 Stock Average plunged 631.56 points or 6.79% to end at 8,674.69
Japan's automaker Mitsubishi Motors said that it expected a 7.6% fall in sales in the first six months through September due to slowing demand in the United States and Europe. Meanwhile, the Nikkei financial daily reported that Mitsubishi UFJ and other big banks would miss their net profit projections for the April-September period. Additionally, trading houses slid after oil fell on fears of declining demand.
On the economic front, a report released by the Ministry of Economy, Trade and Industry showed that the index monitoring the overall industrial activity in Japan fell 1.8% on month in August, slightly worse than the analysts' expectation for a 1.7% monthly fall after a 0.8% rise in July.
Meanwhile, the Chain Stores Association said in a report that sales in Japanese supermarkets, adjusted for the number of stores, declined 2.2% on year-over-year basis in September. Unadjusted sales fell 5.6%. On a monthly basis, sales at Japan's supermarket stores were down 7.1%.
Banks were hit hard as stocks fell across all sectors. Japan's largest bank, Mitsubishi UFJ Financial Group, plunged 8.8%, Mizuho Financial Group slid 8.5%, and Sumitomo Mitsui Financial Group tumbled 8.0%. Elsewhere in the financial sector, top brokerage Nomura Holdings fell 8.4%.
A stronger yen weighed on exporters. Sony slumped 9.3%, Canon shed 6.1%, and Panasonic plummeted 8.4%. Toyota Motor dropped 6.9% amid media reports that the parent company will post its first decline in annual global sales in a decade this year, hurt by slowing demand worldwide as well as the global financial crisis. Reports indicated that Japan's largest automaker might sell 8.30 million units in 2008, excluding subsidiaries and affiliates, down from 8.43 million units in 2007.
In the tech sector, NEC plummeted 11.3% after the company slashed its annual operating profit forecast by 90% on weak demand.
Among trading houses, Mitsubishi Corp. sank 8.9%, Mitsui & Co shed 8.8%, and Itochu Corp slumped 11.2%. Oil and gas miner Inpex Holdings cracked 11.0% and Nippon Mining Holding fell 8.6%.
CHINA
The Chinese stock market closed sharply lower, extending Tuesday's losses. Stocks opened lower, tracking Wall Street's decline overnight, and widened their losses after some key companies reported weaker-than-expected quarterly earnings. The benchmark Shanghai Composite Index closed down 62.71 points or 3.20% at 1,895.82.
Power producers fell after Huaneng Power International reported loss, while resources stocks and property developers lost ground on recession fears.
Huaneng Power International slumped by the 10% after the company announced a net loss of 2.16 billion yuan in the third quarter. The company also said that it expects a net loss for 2008. GD Power Development plunged 7.5%.
In the resources sector, Jiangxi Copper fell 2.0% after the company reported a 26.9% fall in third-quarter net profit to 919.5 million yuan on year-over-year basis. Aluminum Corp of China lost 4.4%.
Index heavyweight PetroChina shed 5.7%. Trading in shares of PetroChina resumed today after a suspension yesterday due to a shareholder meeting. China Petroleum & Chemical or Sinopec fell 3.6%.
Property developers were hit after the National Development and Reform Commission said that property prices in 70 major Chinese cities rose 3.5% on year in September, down from a 5.3% in August. China Vanke declined 5.3% and Poly Real Estate Group dropped 5.4%.
On Tuesday, the Ministry of Finance and the State Administration of Taxation said in a joint statement that China will raise export rebates on textiles, toys and apparel and some other products next month to support exporters amid declining external demand. Textile firms gave up most of their early gains after the rebate news. Luthai Textile declined 0.8% and Shijiazhuang Changshan Textile slipped 0.4%.
Anhui Conch Cement gave away 5.9% after its latest earnings failed to meet market expectations. Third-quarter net profit under Chinese accounting standards rose 13.3% on year to 704.27 million yuan.
Banks finished mixed. Bank of Beijing fell 2.1% projecting a net profit increase of 80% in the first nine months in 2008, but Hua Xia Bank rose 1.4% after raising net proceeds of 11.38 billion yuan from the placement of 790.53 million additional shares to its three largest shareholders, steelmaker Shougang Group, State Grid Corp of China and Deutsche Bank.
Elsewhere:
Taiwan's Taiex closed down 1.6% at 4,862.
Singapore's STI closed down 5.2% at 1,821.
Indonesia's Jakarta Composite Index closed down 4.2% at 1,3790.
New Zealand's NZX 50 index gave up 1.8% to 2,899.40.
Australia's S&P/ASX 200 index ended 3.4% lower at 4,156.10.
with files from other wire services
