TOKYO, April 16 (Reuters) – Japanese stocks were expected to
drop o n Monday, tracking a global pullback on renewed concerns
about Europe’s debt crisis after rising bond yields in Spain and
a record-high cost of insuring the country’s debt against
default spooked investors.
Market players said the benchmark Nikkei average was likely
to trade between 9,450 and 9,600 on Monday after Nikkei futures
in Chicago closed at 9,530, down 110 points or 1.1
percent from the Osaka close of 9,640.
“Europe’s sovereign debt problems continue to be a concern.
Even with last week’s options settlement, trading volume remains
low,” said Hiroichi Nishi, equity general manager at SMBC Nikko
Securities.
“The session will start off with selling but depending on
forex moves, in afternoon trade we could see the Nikkei move
towards 9,600,” he said.
Strategists said buying would provide support if the index
dropped below 9,500 on Monday.
U.S. stocks closed out their worst week this year on Friday,
with financials, materials and energy shares sold off after
disappointing Chinese growth data and concerns that Europe’s
debt crisis was flaring up again.
The cost of insuring Spanish debt against default for five
years closed above 500 basis points for the first time,
according to provider Markit on Friday, amid fears about the
high exposure of the country’s banking sector to sovereign debt.
Data on Friday showed Spanish banks had borrowed a record
316.3 billion euros from the European Central Bank in March, and
markets fear much of the funds have been placed in domestic
sovereign debt.
The Nikkei ended up 1.2 percent at 9,637.99 and the
broader Topix gained 0.7 percent to 815.48 on Friday.
> Wall St ends worst two weeks since November
> Euro falls as Spanish debt worries resurface
> Global growth concerns push yields below 2 pct
> Gold falls almost 1.5 pct in end-of-week liquidation
> Oil slips as China growth lags forecast
STOCKS TO WATCH
– KANSAI ELECTRIC
Two idled nuclear reactors operated by Kansai Electric Power
Co were declared safe for restart and Japan’s trade minister
said they would need to be restarted to avoid a summer power
crunch in western Japan.
– NIPPON STEEL, JFE HOLDINGS
Nippon Steel Corp and JFE Holdings Inc are
expected to have earned stronger-than-expected pretax profit for
fiscal 2011 due to recovering exports and demand from increased
auto production, the Nikkei business daily said on Monday.
Nippon Steel is expected to report a pretax profit of about 130
billion yen ($1.6 billion) for the year ended March 31, while
JFE is likely to post 50 billion yen in pretax profit, the paper
said.
– OLYMPUS
Japan’s market watchdog on Friday recommended the Financial
Services Agency fine Olympus Corp about 200 million yen
($2.5 million) for false accounting in one of the country’s
biggest corporate scandals.
– UNIPRES CORP
Autoparts maker Unipres Corp will partner with trading house
Marubeni Corp and Indonesia’s Indomobil Group to begin
autoparts production in Indonesia, the Nikkei business daily
said on Monday. Unipres is expected to begin production at its
plant in June and initially supply parts to Nissan Motor Co
.
– TOYOTA TSUSHO
South Sudan said on Friday that Toyota Tsusho would soon
make a financial proposal on the construction of a pipeline to
transport the country’s oil to a port in Kenya for export, after
the Japanese firm completed a feasibility study.
