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Tokyo stocks drop on worries about Portugal bank
[July 10, 2014]

Tokyo stocks drop on worries about Portugal bank

(Japan Economic Newswire Via Acquire Media NewsEdge) Tokyo stocks dropped Friday morning as a risk-averse mood spread in the market due to concerns about the financial health of Portugal's leading bank.

The 225-issue Nikkei Stock Average shed 40.20 points, or 0.26 percent, from Thursday to 15,176.27. The broader Topix index of all First Section issues on the Tokyo Stock Exchange was down 5.17 points, or 0.41 percent, at 1,254.08.

Tokyo stocks succumbed to selling from the outset of the morning session following overnight falls in major European and U.S. markets triggered by investor unease about Portugal's banking woes.

The move came after Espirito Santo Financial Group, the largest shareholder in Banco Espirito Santo, suspended trading in its shares and bonds.

The key indexes, however, erased some of early losses toward the end of the session as investors came to believe the problem would not lead to a financial crisis involving the entire eurozone, said Masashi Akutsu, equity strategist at SMBC Nikko Securities Inc.

"Expectations of a rise of Japanese shares ahead were also solid," spurring buying on dips, Akutsu added.

Exporters met with selling as the U.S. dollar remained weak in the lower 101 yen zone, with Toyota Motor falling 32 yen, or 0.5 percent, to 5,971 yen and Toshiba declining 6 yen, or 1.3 percent, to 466 yen.

Honda also took a hit, losing 52 yen, or 1.5 percent, to 3,521 yen, following its announcement the previous day that it would recall a total of 175 Fit and Vezel hybrid vehicles because of a faulty engine control system that could cause problems such as unintended acceleration.

Other major decliners included marine transport, steelmaker and brokerage shares.

In contrast, Canon jumped 81 yen, or 2.5 percent, to 3,342 yen on a Nikkei business daily report that the printer maker is likely to see its consolidated operating profit for the April-June period rise 10 percent year-on-year to 110 billion yen.

On the First Section, decliners outnumbered advancers 1,258 to 399, while 158 finished the morning unchanged.

(c) 2014 Kyodo News

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