The Japanese market is trading sharply lower on Thursday with several front line stocks tumbling to their lowest levels since March, following the overnight debacle on Wall Street where stocks plunged on weak U.S. manufacturing data.
Automobile, banking, chemicals, machinery, retail and electric machinery stocks plunged sharply in opening trades and are still mostly down with notable losses. Shares from foods, pharmaceuticals, steel and non-ferrous metals sections are also mostly down in negative territory.
The benchmark Nikkei 225 index, which nosedived to 9,517.3 in early trades, is now down 164.4 points or 1.7 percent at 9,555.2.
The mood is so bearish that just nine stocks out of the 225-stock strong Nikkei index are up in positive territory at present. Among them, Nichirei Corp is gaining the most, trading 2.3 percent up over its previous closing price. Daiwa Securities, Taisei Corp., Nippon Suisan and Credit Saison are up 0.4 to 0.9 percent.
Tokyo Electric Power is down 4.6 percent at a new low, with concerns about credibility and funding issues triggering a sell-off at the counter.
Nippon Electric Glass, Softbank, Nippon Paper, Nippon Light Metals and Sumitomo Realty are down 3 to 3.5 percent.
Showa Denko KK, Hitachi Construction Machinery, Mitsubishi Materials, Tokyo Electronic, Asahi Glass, Mitsui Chemicals, Nisshin Steel, IHI, J Front Retailing, Showa Shell, Inpex, Bridgestone and Komatsu are all losing 2 to 3 percent.
Automobile stocks Nissan Motor, Toyota Motor, Honda Motor and Mazda Motor are down 2 to 3.5 percent.
Shinsei Bank, Shizuoka Bank, Mitsubishi UFJ Financial and Mizuho Trust & Banking are among the prominent losers in the banking space.
According to a report from the Ministry of Finance, capital spending in Japan was up 3.3 percent in the first quarter of 2011 compared to the previous three months. That beat analyst expectations for a gain of 3.0 percent on quarter following the 3.8 percent increase in the fourth quarter of 2010.
Minus software, capital spending jumped 4.2 percent on quarter - well above forecasts for a 0.8 percent contraction following the 4.8 percent surge in the previous three months. The ministry also warned that the numbers for capital spending are likely to be bleak, reflecting the devastating earthquake and tsunami on March 11.
In the currency market, the U.S. dollar traded slightly below 81 yen in early deals in Tokyo. The yen is currently trading at 81.09 to the U.S. dollar.
Among other markets in the Asia-Pacific region, Japan, New Zealand and South Korea are down with notable losses, and Malaysia is trading modestly lower. Markets across the region ended on a mixed note on Wednesday.
On Wall Street, stocks plunged sharply, with another disappointing batch of economic data raising concerns about the outlook for the U.S. economy. The major averages ended the day near their lows for the session. The Dow plunged 279.5 points or 2.2 percent to 12,290.1, the Nasdaq tumbled 66.1 points or 2.3 percent to 2,769.2 and the S&P 500 plummeted 30.7 points or 2.3 percent to 1,314.5. The sharp losses on the day pulled both the Dow and the S&P 500 down to their lowest closing levels in well over a month.
Major European markets ended notably lower on Wednesday. The U.K.'s FTSE 100 index lost 1 percent, while the French CAC 40 index and the German DAX index both closed lower by 1.1 percent.
Crude oil prices drifted lower, as disappointing reports on U.S. private sector employment and manufacturing activity raised concerns about demand for oil. Light, sweet crude for July delivery ended down US$2.41 or 2.35 percent at US$100.29 a barrel on the New York Mercantile Exchange.
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