Nikkei 225 Watch: Bearish Sentiment across Asia

on Aug 20, 2013
Listen Tuesday August 20th: The Nikkei today plunged, shadowing Wall Street’s fall on Monday, as investors across Asia withdrew from riskier assets. The Japanese benchmark closed 361.75 points or 2.63 percent lower at 13,396.38 – its lowest level since June 28. The broader Topix index, which tracks all companies on the Tokyo Exchange’s First Section, fell by 23.86 points or 2.08 percent to 1,125.27.

Japanese automakers with exposure to emerging economies were one of the main fallers. **Hino Motors** dropped 8.52 percent to ¥1,321.00, **Suzuki Motor** declined 7.99 percent to ¥2,224.00 and **Honda Motor** lost 4.08 percent to ¥3,645.00. **Daihatsu Motor**, which counts Indonesia as its largest overseas source of revenue, plunged six percent to ¥1,883.00 after the southeast Asian country’s current-account deficit widened to a record in the second quarter.

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**Inpex**, an exporter of oil and natural gas, fell 3.18 percent to ¥426,000.00 and **Fast Retailing** lost 3.26 percent to ¥31,150.00.
Stocks dropped across Asia on concerns that the economies in the region are weakening and due to ongoing uncertainty surrounding the future direction of Fed’s monetary policy. “You can’t isolate Japan when you get a risk-off environment,” said Nader Naeimi, head of dynamic asset allocation at AMP Capital Investors, as quoted by Bloomberg. Still, “Japan can outperform, helped by a weaker yen,” he added. A weaker yen makes Japanese exporters’ products more competitive abroad and boosts the companies’ dollar earnings when repatriated.

The Australian S&P/ASX 200 closed 34.30 points or 0.67 percent lower at 5,078.20, depressed by weak corporate results. **QBE Insurance**, the country’s biggest insurer, fell 5.46 percent to A$16.10 after unveiling a 37 percent drop in half-year net profit. Mining contractor **Macmahon Holdings** also disappointed investors with a bigger-than-expected full-year net loss. Shares in the company plunged by 20 percent to A$0.140.

The minutes of the Reserve Bank of Australia’s latest policy meeting were released today, hinting that
future rate cuts were possible, but not imminent. The minutes had little effect on the S&P/ASX 200.
!m[Disappointing Corporate Results Drag down Australian Benchmark ](/uploads/story/4935/thumbs/pic1_inline.jpg)
The Shanghai Composite index fell by 18.34 points or 0.88 percent to 2,067.27. Heavier losses were capped by the China central bank governor’s pledge to provide additional financial support to the economy.

“We continue to expect further targeted stimulus measures and a 7.7 percent GDP growth this year,” Credit Agricole analysts wrote in a note to investors.
Shares in railway companies surged after Beijing promised to increase investment in the sector. **Daqin
Railway** rose by 4.52 percent to 6.93 yuan, while **China Railway Construction** and **China Railway** increased by 1.45 percent and 0.37 percent to 4.91 yuan and 2.73 yuan, respectively.
**The Nikkei 225 was 341.13 points or 2.48 percent lower at 13,417.00 as of 20.08.2013, 08.00 BST.**
**The Topix was 23.86 points or 2.08 percent lower at 1,125.27 as of 20.08.2013, 08.00 BST.**
**The S&P/ASX 200 was 34.30 points or 0.67 percent lower at 5,078.20 as of 20.08.2013, 08.00 BST.**
**The Shanghai Composite was 18.34 points or 0.88 percent lower at 2,067.27 as of 20.08.2013, 08.00 BST.**


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