Nikkei Drops to 1-month Low as China PMI Impact Drags; Daiichi Sankyo Tumbles
January 24, 2014 2:16 PM EST
Japan's Nikkei share average dropped to a one-month low on Friday morning as weak Chinese manufacturing activity data continued to hurt sentiment - keeping the market risk-averse before the U.S. Federal Reserve's policy-setting meeting next week.
Pedestrians standing in front of an electronic board displaying various stock prices outside a brokerage are reflected in a polished stone surface, in Tokyo October 23, 2013.
Friday's notable losers included Daiichi Sankyo Co (4568.T), which tumbled 5.8 percent to a near three-month low of 1,901 yen after the U.S. Food and Drug Administration said it had banned more products from Daiichi Sankyo's Indian subsidiary Ranbaxy Laboratories (RANB.NS) from entering the United States due to manufacturing violations.
Daiichi Sankyo said it is now confirming the situation with Ranbaxy.
Nitto Denko swam against the tide, rising 10 percent to 4,680 yen, its highest since Dec 11. It was the eighth-biggest traded stock by turnover after it reported strong December monthly sales for materials used in flat panel screens and tablet devices. Citigroup raised its target price to 5,400 yen from 5,200 yen.
The Nikkei dropped 1.7 percent to 15,431.85 in mid-morning trade after falling to as low as 15,377.64, the lowest since Dec 18. The index is about to fall below 15,337.99, a 38.2 percent retracement of the rise to a December high from a October low. On December 30, the Nikkei reached as high as 16,320.22, the highest level in six years.
Analysts said investors have avoided taking risks for mainly two reasons - weaker-than-expected December U.S. jobs data and disappointing manufacturing data in China released on Thursday.
"Sentiment was already poor because of the poor U.S. jobs data released early this month, and it was exacerbated by the Chinese figures," said Naoki Kamiyama, head of Japan equity strategy at Bank Of America Merrill Lynch. "The market is very cautious about the next U.S. jobs data to be released in two weeks. If the market is disappointed again, the Japanese market may enter a correction phase."
He noted that investors were focused on the Fed's next policy meeting, scheduled for January 28-29, to be quickly followed by Chairman Ben Bernanke's handover to current Vice Chair Janet Yellen on January 31.
The Topix dropped 1.3 percent to 1,270.89.
Exporters were lower as the dollar neared a two-week low of 102.97 yen. Toyota Motor Corp (7203.T) shed 1.3 percent, Honda Motor Co (7267.T) dropped 1.4 percent while Panasonic Corp (6752.T) fell 2.4 percent. (A stronger yen erodes Japanese exporters' overseas earnings when repatriated.)
The JPX-Nikkei Index 400, which started trading in January, shed 1.3 percent to 11,471.99.
Most Popular Slideshows
- Pope Francis Meets Sudanese Woman Who Was Spared Death for Apostasy (PHOTOS)
- Malaysia Airlines Flight MH17: King Williem-Alexander, Queen Maxima Hold Solemn Reception Ceremony for Victims
- Jennifer Lawrence & Nicholas Hoult Allegedly Split: Mad Max Actor Cheats with Kristen Stewart & Riley Keough - Reports
- Prince George Birthday: Adorable New Pictures of George Touching a Butterfly on William's Hand Released [SEE PHOTOS]
Join the Conversation
- Apple iPhone 6 on Two Confirmed Release Dates, New Parts Leaked Suggesting Bigger iPhone to Come
- Google Nexus 6, 8 with Android L on Release Date Promises Killer Mobile Device Experience
- iPhone 6 Release Date Relevance to iOS Newbies: Specs Meaning, Price Considerations
- Xiaomi Mi4 vs OnePlusOne vs Nexus 5: Mi4 is the ‘Perfect’ Phone
- Israeli Women Stripping Naked for IDF Soldiers
- HTC One M8 Android 4.4.3 KitKat Update Roll Out, Introducing the HTC One Remix
- The Pirate Bay Releases ‘The Mobile Bay’: Mobile Torrent Download Made Easier but Remains Illegal