Japan's Nikkei Average Falls 9th Day

Japan's Nikkei 225 Stock Average fell for a ninth day, its longest losing streak in almost four years, as concern higher materials costs will erode earnings overshadowed gains by commodities companies.
TradingEconomics.com, Bloomberg 7/1/2008 6:17:49 AM

Tokyo Tatemono Co. sent a gauge of developers to a three- month low after cutting its profit forecast on rising costs and slumping demand. Mitsubishi Corp., a trading company which earns half its profit from commodities, and Tokyo Electric Power Co. gained as slumping business confidence boosted demand for companies that can withstand a slowing economy.

The Tankan index slid to for a third quarter to 5 points in June from 11 in March, the Bank of Japan said today, whereas economists had estimated the gauge would fall to 3.

The Nikkei dipped 18.18, or 0.1 percent, to close at 13,463.20 in Tokyo, falling for a ninth-straight day, the longest losing streak since September 2004. The Topix index fell 0.03, or less than 0.1 percent, to 1,320.07.

Seventeen of 33 industry groups on the Topix declined. Trading volume on the bourse was the thinnest since June 24.

Large companies expect profits to drop 7 percent in the year to March 31, compared with a 0.3 percent increase predicted three months ago, the Tankan report showed. A separate report from the Labor Ministry today showed wages grew at the slowest pace in five months in May.

Tokyo Tatemono plummeted 14 percent to 588 yen, its steepest drop since May 2004. The company slashed its full-year profit target by more than a third, saying increasing materials costs had boosted condominium prices and sapped demand.