Nikkei sags on underwhelming U.S. jobs data
* Fast Retailing falls 1.6 pct, changes profit forecast * Komatsu, Sumitomo Heavy Industries hurt by weak demand * Midsized shippers buck the trend By Sophie Knight TOKYO, July 9 (Reuters) - Japan's Nikkei share average broke the psychologically important 9,000 level in early trade on Monday after poor U.S. jobs data reinforced concerns about flagging global growth, while domestic industrial machinery makers suffered losses on falling orders. The Nikkei dropped 1 percent to 8,933.67 while the broader Topix index fell 0.8 percent to 765.49. Mid-sized shippers and telecommunication companies bucked the trend, but heavyweight Fast Retailing Co dragged on the index, falling 2.2 percent after a drop in sales at its Uniqlo casual-clothing chain in Japan provoked it to lower its full-year forecast below market estimates on Friday. "The jobs data showed the U.S. economy isn't terrible but it's also not good," said Fumiyuki Nakanishi, general manager of investment and research at SMBC Friend Securities. "If European leaders fail to come to some kind of agreement tonight then the sell-off will likely continue." Euro zone finance ministers are due to meet in Brussels later in the day to discuss a bailout of Spanish banks and the ongoing debt crisis in the region. Komatsu Ltd dropped 3.3 percent after Nomura Securities downgraded it to "neutral" from "buy" and cut its target price to 2,100 yen from 2,600 yen to reflect the likelihood of slowing demand for construction machinery in China. The downgrade comes after core machinery orders in Japan slumped 14.8 percent in May, exceeding the median forecast of a 3.3 percent decrease in a Reuters poll. Sumitomo Heavy Industries also shed 3.6 percent. Mid-sized shipping companies steamed against the tide, however, with Meiji Shipping Co Ltd surging 8 percent and Kyoei Tanker Co Ltd and Inui Steamship both up 2.3 percent. The Nikkei dropped below 9,003.63, the 38.2 percent retracement of its fall between its March high of 10,255 and June low of 8,295. Analysts are concerned that the Nikkei's failure to breach the 50 percent retracement level last week indicate its one-month rally has run out of energy. "Many people have been eyeing 9,000 as their exercise price for the options SQ at the end of the week, but now it looks like it could go down to 8,700," Nakanishi said. An options special quotation or SQ indicates the expiration of several stock options, which usually spikes volumes.
- White House reverses, says Obama met uncle and lived with him during law school
- Flights delayed as air pollution hits record in Shanghai
- South Africa mourns Mandela, will bury him on December 15 |
- Analysis: Boeing bidders dangle goodies to win 777X jetliner
- RPT-UPDATE 1-Ford leans on global Mustang to burnish overseas image