Following overnight losses of US shares, the Japanese shares also saw red as Nikkei 225 Average plunged 325.2 points or 3.55% to end at 8,824.06. The heavy selling was also triggered by the yen’s gains against the greenback and the euro. USDJPY fell to ¥84.05 while EURJPY hit ¥106.16 on Tuesday.
Japan’s economic data released today showed industrial production increased in July by 0.3% after declining 1.1% in June. Retail sales also advanced 0.7% in July, faster than the June’s gains of 0.4%. The PMI data for manufacturing however, slipped from 52.8 in July to 50.1 in August. In the property sector, housing starts were up from 0.75 million to 0.77 million in July or up 4.3% year-on-year.
Corporate n
ews came from the automobile industry as Guangzhou Automobile Group Co. a partner of Toyota Motor Corp. and Honda Motor Co. in China had its net profit increased more than three times of last year’s 1H. China has been a primary market for Japanese auto producers like Toyota, Honda, and Nissan. Toyota ended the day at ¥2,860 (-2.39%), Nissan at ¥642 (-1.83%) and Honda at ¥2,779 (-2.66%).Elsewhere, from the media roundtable in Abu Dhabi, Renault-Nissan CEO Carlos Ghosn hinted on Nissan’s plan to increase production in South Korea. The move was intended to reduce the exposure to yen’s recent strength against the greenback and euro which could damage the company’s competitiveness.
Among worst performers, Tokyo Electron shed 5.74% at ¥3,940, Advantest fell 5.34% to ¥1,594 and Sumitomo Metal Industries which ended at ¥197, down 4.83%.
In Hong Kong, Foxconn International plunged 6.65% to end at HK$5.19 after the market responded to its first-half results. In 1H 2010 the company suffered from net losses of US$142.6 million compared to last year’s losses of US$18.7 million. The company’s revenue was at US$3.23 billion, up 2.2% from last year’s $3.16 billion. Lower product prices, adjustments in company’s product mix and also the increase in depreciation expenses related to the production facility relocations were the factors behind the worsening financial performance in 1H 2010. Despite worsening performance, UBS revised FIH’s target to HK$5.0 from HK$3.4.
On the government front, the Hong Kong government sold a luxury residential site in Kowloon Peninsula for HK$1.285 billion, higher than the forecast value range of HK$868 million to HK$1.09 billion. The high sale price of the site indicated strong appetite from developers despite limited supply and also amid the government’s attempts to stem the ballooning property prices in Hong Kong as well as in China.
Elsewhere, Hong Kong retail sales were reported to have increased 16% year-on-year on volume basis in July, against the market consensus of a rise by 10.7%.
China PMI data will set the tone on Wednesday as the August index is expected at 51.5, up from 51.2 in July. A downside deviation will certainly damage the investors’ sentiment and will pull down global stocks as global recovery concerns will return, especially following the poor string of US data.
Among gainers, China Resources increased 2.86% to HK$32.40, COSCO Pacific advanced 1.58% to HK$10.26 and Cheung Kong Infrastructure was at HK$30.00 by the end of the day, or up 1.45%. Joining Foxconn at the bottom, Esprit Holdings tumbled 2.35% to HK$43.60 and Bank of East Asia shed 2.01% to end at HK$29.20.
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