Nikkei sees biggest drop in 3 months as recession news hits

lunes 17 de noviembre de 2014 03:13 GYT
 

* Japanese stocks down as recession spooks investors
    * Nikkei sees biggest one-day drop since August
    * Retail stocks hit

    By Thomas Wilson
    TOKYO, Nov 17(Reuters) - Tokyo stocks suffered their biggest
one-day slump since August on Monday after Japan's economy
unexpectedly slipped into recession, prompting investors to book
profits from recent gains.
    Japan's economy unexpectedly shrank an annualised 1.6
percent in the third quarter, following a sharp contraction
between April and June caused by a hike in the national sales
tax. Economists had seen the world's third-biggest economy
rebounding by 2.1 percent. [ID: nL3N0T612F]    
    Baulking at the data, investors booked profits from the
outsized gains of the last two weeks. The Nikkei benchmark
 closed down 3.0 percent at 16,973.80, its lowest since
Nov 10. 
    Even with Monday's losses, the Nikkei has risen 8.4 percent
since Oct 30, as investors cheered the Bank of Japan's
additional easing, a reallocation to Japanese shares by the
government pension fund, and speculation on the likely
postponement of second sales tax hike.
    "Until last week the market has been going up strongly. But
now selling will increase, given the bad state of the economy,"
said Masayuki Doshida, senior market analyst at Rakuten
Securities in Tokyo.  
    The shock GDP figures set the stage for Prime Minister
Shinzo Abe to call a snap election and postpone the tax
increase, slated for Oct 2015. Japanese media have said that Abe
could announce his decision as early as Tuesday.
    Market players increasingly support the delay. Growth must
take precedent over bolstering Japan's parlous finances and
action must be taken to ward off the risk of declining faith in
Japan among international bond markets, said Doshida.
    With private consumption rising only 0.4 percent compared to
the second quarter - only half that expected - retail shares
were badly hit.  
    Owner of the Uniqlo clothes brand Fast Retailing Co Ltd
 shedding 3.6 percent, accounting for over a third of
the Nikkei's losses.  
    Department stores Takashimaya, Marui Group Co Ltd
, and J.Front Retailing Co were also sold, 
sagging 5.6 percent, 5.3 percent and 3.0 percent respectively.  
 
    Also suffering was market heavyweight Softbank Corp
, which shed 2.3 percent.
    The broader Topix slipped 2.5 percent to 1,366.13.
The JPX-Nikkei Index 400 also declined 2.5 percent,
closing at 12,466.69.

 (Reporting by Thomas Wilson; Editing by Eric Meijer)