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Saturday 06th of February 2010
October 12, 2006    

Banks decline in Tokyo

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by Elaine Frei

Declines in the banking sector sent the Tokyo equities markets lower on Thursday, with the Nikkei 225 dropping 0.2 percent to 16,368.81 and the Topix index down 0.5 percent to 1,613.64. Consumer finance companies, however, saw gains on the session.

In the consumer finance sector, Takefuji added 0.9 percent to ¥4,630, while Jaccs was 4.1 percent higher to ¥890 and Aiful advanced 4.4 percent to ¥4,020. Despite the gains in the sector, it was still down for the week.

Canon dropped 2.4 percent to ¥6,510 on a downgrade from “buy” to “hold” from Deutsche Bank, making the cut on the basis of the printer and copier maker’s rising share price. Sony, however, was 1.8 percent higher to ¥4,590 after its joint project with Ericsson to make mobile phones posted much better than expected results in the third quarter.

The banking sector saw declines on the session, falling 2.3 percent as a whole after UBS cut the ratings of several of Japan’s largest financial institutions. The reason given for the downgrades was that spreads between deposits and lending rates have not been improving quickly enough. SMFG dropped 1.6 percent to ¥1,240,000, while Mizuho Financial fell 2 percent to ¥906,000, Mitsubishi UFJ was 3.2 percent lower to ¥1,530,000, and Sumitomo Trust and Banking was off by 4.6 percent to ¥1,248.

These declines were partly offset by a 1.3 percent rise in the non-ferrous metals sector after metals prices increased. Sumitomo Metal Mining added 3.5 percent to ¥1,463.

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