Nikkei hits 4-wk low on weak Japan GDP, US fiscal woes
* Nikkei down 0.6 pct * Nikkei heads for 6th straight session of loss * Suzuki Motor climbs on strong H1, keeps full-year outlook By Dominic Lau TOKYO, Nov 12 (Reuters) - The Nikkei average slipped to a four-week low on Monday, heading for a sixth session of decline, hurt by weak Japanese GDP data and concerns over U.S. fiscal woes that threaten to push the world's largest economy into recession. Exporters, which will be hurt most if the U.S. slips into recession on 'fiscal cliff' woes, took a beating. Toyota Motor Corp, Honda Motor Co, Canon Inc and Nikon Corp were down between 0.8 and 1.1 percent. Sony Corp shed 1.4 percent after Moody's Investors Service cut the consumer electronics maker's debt rating to Baa3, just one notch above 'junk' rating, citing shrinking demand for its products. The Nikkei fell 0.6 percent to 8,703.73, although upbeat data from the United States and China helped limit losses. A six day losing run would be longest such streak since July. "It's partly due to the GDP," a trader at a foreign bank said. "It's also partly the feeling that the yen is getting stronger again, partly the concern over the 'fiscal cliff'." "I think it's just a bit of uncertainty around. There is nothing to go for in the results (from companies)." Japan's economy shrank 0.9 percent in the three months to September, marking the first contraction in three quarters, adding to signs that slowing global growth and tensions with China are nudging the world's third-largest economy into recession. In the United States, the political bickering over $600 billion of spending cuts and tax increases taking effect in the new year, known as the 'fiscal cliff', also threatened to tip the world's largest economy into recession. The concerns have been weighing on global equities, including Japanese stocks, particularly as they have also been adding upward pressure to the yen. Adding to the gloom, company earnings have been weak this quarterly reporting season, with 59 percent of 141 Nikkei companies that have reported so far undershooting market expectations, according to Thomson Reuters StarMine. That compared with 54 percent in the previous quarter. But the market gained some support from better-than-expected U.S. consumer sentiment, which rose to its highest level in more than five years in November, and Chinese exports growth which hit their fastest pace in five months. The broader Topix index eased 0.6 percent to 726.64. Among the gainers were Suzuki Motor Corp, which surged 5.1 percent after the automaker said nine-month net profit rose 30.9 percent and kept its full-year outlook, saying that a decline in sales in China on anti-Japan sentiment would be offset by gains in Southeast Asia. The benchmark Nikkei is still up 3 percent this year, trailing a 9.7 percent gain in the U.S. S&P 500 and a 10.5 percent rise in the pan-European STOXX Europe 600. Credit Suisse said in a report it was keeping Japanese stocks at 'benchmark' in its global equities model portfolio but noted that Japan's monetary policy remained the tightest of any major region. "Both fiscal and monetary policy look abnormally tight. Earnings momentum is very poor. Only Japan's pro-cyclicality, a probably LDP-led government next year and (still) very cheap asset-based valuations stop us from going underweight," it said. Japanese equities carry a 12-month forward price-to-book ratio of 0.83, much cheaper than the S&P 500's 1.9 and STOXX Europe 600's 1.38, data from Thomson Reuters Datastream showed.
Trending On Reuters
We are living longer but not creating financial plans to keep pace. Advisers give tips on how to make sure you don’t outlive your money. Video