Nikkei slides to 1-week low as Greek crisis batters global markets

domingo 28 de junio de 2015 22:05 GYT
 

* Contagion to Europe's other regions could be risk - trader
    * Nikkei may dip below 20,000 this week, but such dip may
create buying opportunities - analyst

    By Ayai Tomisawa
    TOKYO, June 29 (Reuters) - Japan's Nikkei share average
slipped to a one-week low as risks of Greece defaulting on its
debt repayment this week spiked dramatically, forcing Athens to
impose capital controls to halt bank runs.
    After bailout talks between the leftwing government and
foreign lenders broke down at the weekend, the European Central
Bank froze vital funding support to Greece's banks, leaving
Athens with little choice but to shut down the system to keep
the banks from collapsing. 
    The fear of contagion prompted investors to unload riskier
assets such as stocks, dragging down all of the Topix's 33
subsectors.
    The Nikkei share average dropped 2.0 percent to
20,295.56 in mid-morning trade after tumbling to as low as
20,190.08 earlier, the weakest since June 22.
    "There are two things to keep in mind. One is an emotional
reaction to sell risk assets which is seen now, but this isn't
so serious," said Kyoya Okazawa, head of global market at BNP
Paribas. "The real risk is contagion to other regions such as
Italy and Spain although it is less likely than the euro crisis
before for now."
    He said that Europe is much less vulnerable to contagion
than it was during the euro zone crisis. There are also few
countries having similar political issues as Greece, he said.
    "As long as the Greek problem is contained within Greece,
there should be no major impact (to the Japanese market),"
Okazawa said.
    Financial shares tumbled, with Mitsubishi UFJ Financial
Group and Mizuho Financial Group each falling
2,8 percent, while Nomura Holdings and Daiwa Securities
Group dropped 2.3 percent and 3.0 percent,
respectively.
    Exporters languished, with Toyota Motor Corp 
falling 1.9 percent and Honda Motor Co shedding 2.5
percent.
    Yoshinori Shigemi, a global market strategist at JPMorgan
Asset Management, said that investors will likely stay risk
averse until the planned Greek referendum this weekend.    
    "The Nikkei is likely to stay weak, and it may dip below the
20,000-mark but it shouldn't fall sharply," Shigemi said, adding
that such a dip may create buying opportunities in banks, which
have attractive valuations.
    The broader Topix dropped 2.0 percent to 1,634.45
and the JPX-Nikkei Index 400 shed 1.9 percent to
14,741.43.
    

 (Editing by Shri Navaratnam)