Stock prices are drifting lower in the Japanese market on Tuesday with investors pressing sales, tracking cues from Wall Street where stocks tumbled overnight amid rising concerns about the European economy following a rating downgrade on as many as 28 Spanish banks. The yen's surge against the dollar is also contributing to the weakness in the market.
Automobile, precision instruments, insurance, oil and glass & ceramics stocks are mostly trading weak. Electric power, railway and bank stocks opened on a slightly firm note, but retreated from higher levels subsequently.
The benchmark Nikkei 225 index, which staged a mild recovery after opening notably lower, faltered again due to lack of support and is currently down 65 points or 0.7 percent, at 8,669.6.
Nippon Electric Glass is trading lower by over 7 percent following the company cutting its net-income outlook.
Teijin, TDK Corp, Dai-ichi Life Insurance, JFE Holdings, Japan Steel Works, Mitsumi Electric and Showa Denko KK are trading lower by 3 to 4 percent.
Pioneer Corp is down nearly 3 percent. Mazda Motor, Mitsubishi Chemical Holdings, Sumitomo Chemicals, Sharp Corp, Nippon Yusen KK, IHI Corp, Nippon Steel, Pacific Metals and Mitsui Chemicals are all trading lower by 2 to 2.8 percent.
Meanwhile, Takashimaya, Japan Tobacco, Nippon Paper Group, Mitsubishi Paper Mills, Yahoo Japan, Nippon Light Metals, Tobu Railway and Taisei Corp are trading in positive territory, gaining between 1 percent and 2.3 percent.
On the economic front, an index measuring corporate service prices in Japan was up 0.1 percent on year at 96.1 in May, the Bank of Japan said. That was below forecasts for an increase of 0.3 percent following the 0.2 percent gain in the previous month. On a monthly basis, the index was down 0.4 percent after showing a flat reading in April.
In the currency market, the U.S. dollar traded in the upper 79 yen range in early deals in Tokyo. The yen is currently trading at 79.68 to the dollar.
Among other markets in the Asia-Pacific region, Australia, Shanghai, New Zealand, Singapore, South Korea and Taiwan are trading modestly lower. Malaysia is down marginally, while Hong Kong is up slightly from the unchanged line. Markets across the region ended lower on Monday.
On Wall Street, stocks declined sharply on Monday amid lingering concerns about the ongoing European debt crisis and its likely impact on the global economy.
After moving sharply lower in early trading, the major averages remained stuck firmly in the red throughout the session. The Dow ended down 138.1 points or 1.1 percent at 12,502.7, the Nasdaq declined 56.3 points or 2 percent to 2,836.2 and the S&P 500 slid 21.3 points or 1.6 percent to 1,313.7.
Major European markets also ended notably lower on Monday. While the U.K.'s FTSE 100 index tumbled 1.1 percent, the German DAX index and the French CAC 40 index plummeted by 2.1 percent and 2.2 percent, respectively.
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