Tokyo stocks drop sharply after gloomy business survey
Tokyo stocks fell sharply Friday after the central bank released a survey showing growing gloom among Japan’s corporations. Other markets in the region also declined.
KEEPING SCORE: Tokyo’s Nikkei 225 sank 3.6 percent to 16,164.16 while South Korea’s Kospi fell 1.1 percent to 1,973.57. Hong Kong’s Hang Seng index declined 1.2 percent to 20,523.47 and Shanghai Composite Index in mainland China dropped 0.3 percent to 2,994.77. Stocks in Taiwan, Singapore, Australia and Indonesia were also lower.
JAPAN: The Bank of Japan’s quarterly “tankan” index for large manufacturers fell to 6 in March, down from 12 in December. Japan’s big exporters have been hit by a double whammy of a slowing Chinese economy and a rising yen. The index measures the percentage of responding companies that say business conditions are better minus the percentage that say they are worse. So an index level of 6 means slightly more companies are optimistic than pessimistic — but more pessimistic than three months ago.
ANALYST’S TAKE: The survey “managed to disappoint on every line,” said Angus Nicholson in a daily commentary adding that the result was the worst performance since Bank of Japan began its massive stimulus measures in the second quarter of 2013. “The Nikkei did not handle the release well almost losing over 3 percent today, which could indeed be seen as a nasty portension for global equities heading into U.S. earnings season.”
WALL STREET: U.S. stocks closed mostly lower on Thursday, with chemicals and agricultural companies taking the largest losses. The Dow Jones industrial average fell 31.57 points, or 0.2 percent, to 17,685.09. The Standard & Poor’s 500 index 500 shed 4.21 points, or 0.2 percent, to 2,059.74. The Nasdaq composite index rose 0.55 points to 4,869.85.
OIL: Benchmark U.S. crude lost 36 cents to $37.97 per barrel in New York. The contract rose 2 cents to $38.34 per barrel on Thursday. Brent crude, used to price international oils, fell 17 cents, to $40.16 a barrel in London.
CURRENCIES: The dollar fell to 112.225 yen from 112.512 yen while the euro gained slightly to $1.139 from $1.138.