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Market Update

Nikkei Tumbles 3.3%; Leads Asia Down Ahead of BOJ

Most Asian markets closed with sharp losses Monday, following some lackluster economic reports from China and as traders awaited a speech by Bank of Japan governor.

Japan's Nikkei tumbled the most, down 3.3% as traders took positions ahead of a heavy flow of corporate results this week even as the yen grew stronger against the greenback, weighing on the earnings outlook Japanese exporters.

China's Shanghai Composite lost 1.7% and Hang Seng retreated 0.5%. Mumbai's Sensex was down 0.8% at close. But Australia's S&P/ASX All Ordinaries managed to pull off the day’s lows and finished close to the flat-line, up 0.1%.

Denting sentiment at open was Friday's data that showed profitiablity of Chinese industrial firms increased 6.3% in June, which comes starkly lower than a gain of 15.5% logged in May.

Meanwhile, governor Haruhiko Kuroda of the Bank of Japan was due to deliver a speech later on Monday at 11:30 p.m. Eastern time, and investors were trading cautiously ahead of the event; although speculations were rife the governor would take a leaf out of U.S. Fed chairman Ben Bernanke’s book and deliver some comforting words to soothe investor anxiety pertaining to stimulus measures.

Stocks on the Move

Earnings were in focus in Tokyo as a host of companies geared up to post latest results this week.

Sharp Corp. plunged  over 6%, Toyota Motor Corp. lost 4.1% while Honda Motor Corp. erased 3.3% ahead of their respective results later this week.

Others reporting today included Daiwa Securities (-4.3%), Kobe Steel -2.0%) and Komatsu Ltd. (-3.7%).

Most other exporters as well as power utilities and retailers logged sharp losses ahead of the BOJ governor's speech and on the back of a stronger yen.

In Hong Kong, resources stocks underwent sharp cuts. Angang Steel plunged 5.4%, Zijin Mining Group lost 3.5% while oil giant China Petroleum & Chemical Corp. retreated around 2%. CNOOC dropped 1.5% and PetroChina Co. slipped around 1%.

Property developers were also on the losers' side despite news China's securities regulator is seeking ways to loosen restrictions on property developer's fund-raising.

China Resources Land  slumped over 3% while Poly Property Group Co. and China Overseas Land & Investment erased 2.9% and 1% respectivley.

On the mainland, Shanghai-listed Gemdale Corp. pulled back over 4% while Poly Real Estate Group tumbled around 4%. China Vanke finished down 2.1% lower in Shenzhen.

In Mumbai, stocks opened lower following weak overseas cues and as traders took positions ahead of the central bank's monetary policy review tomorrow.

FMCG players, metal firms, auto makers and banks were among the top losers. Hindalco Industries slumped over 4%, Hindustan Unilever and Sterlite Industries fell 3.7% each, Maruti Suzuki skidded 1.8% while HDFC Bank finished down 1.7%.

In Sydney, stocks opened higher with banks leading the charge but weakness across other sectors offset some of these gains.

National Australia Bank was up 0.5%, Westpac Banking gained 1% while ANZ edged up 0.2%.

Among others, mining stocks were mixed. BHP Billiton and Rio Tinto were little changed but Fortescue Metals Group added 1.1%.