Tuesday, June 18, 2024

Nikkei falls to 8-month low as Toyota drags peers, materials makers

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TOKYO: Japan’s Nikkei stock average closed at a near eight-month low on Friday, dragged down by automakers and their related sectors on growing concerns about a recovery after Toyota cut its global production.

The Nikkei share average fell 0.98% to close at 27,013.25, its lowest since December 28. The broader Topix dropped 0.87% to 1,880.68.

For the week, Nikkei shed 3.4%, the biggest weekly loss since mid-May.

“Toyota triggered declines in the Nikkei. Today many other shares surrounding Toyota were affected,” said Kentaro Hayashi, senior strategist at Daiwa Securities.

“Toyota’s output cut almost crashed hopes of an economic recovery from the pandemic low.” Toyota Motor said on Thursday it would slash global production for September by 40% from its previous plan.

Toyota slipped 4.09%, while Honda Motor lost 4.84% and Nissan Motor plunged 7.25%. Toyota’s affiliates Denso tumbled 8.83% while Aisin lost 5.28%.

Makers of car materials, such as steel, grass and rubbers led declines in the Tokyo Stock Exchange’s 33 industry subindexes.

Shippers fell the most among the subindexes, with a drop of 8.17%.

Chip-related shares were also weak despite gains in their U.S. peers after chip maker Nvidia Corp’s forecast of third-quarter revenue beat Wall Street’s expectations.

Advantest snapped earlier gains to fall 0.45%, while Tokyo Electron edged up 0.28%.

Defensive shares shined, with food maker Ajinomoto, up 2.65%, rising the most in the Nikkei, followed by utility Tokyo Electric Power Company, rising 2.48% and drug maker Daiichi Sankyo up 2.44%.

Denso was the worst performer in the Nikkei, followed by shipper Nippon Yusen losing 8.42% and its peer Kawasaki Kisen down 8.15%. – Reuters

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