Japanese stocks fell, sending the Topix (TPX) Index to its biggest decline in nine months, after a socialist was elected France’s president, raising concern austerity measures will be rejected in Europe. Shares also fell as U.S. employers added fewer jobs than expected.
Konica Minolta Holdings Inc., a photo film maker that counts Europe as its biggest market, slid 3.9 percent after the euro fell against the yen. Honda Motor Co. (7267), a carmaker that counts North America as its biggest market, sank 5.6 percent. Gree Inc. (3632) plunged 23 percent after the government said some social network games use “questionable” sales methods.
“The situation in Europe is tough,” Khiem Do, Hong Kong- based head of Asian multi-asset strategy at Baring Asset Management Asia Ltd., said on Bloomberg Television. The firm oversees about $10 billion. “Very few nations can stand austerity. If the European Monetary Union stays the same, something has to give.”
The Topix lost 2.6 percent to 772.06 at the 3 p.m. close in Tokyo, its biggest drop since Aug. 5. The Nikkei 225 Stock Average (NKY) sank 2.8 percent to 9,119.14, with volume about 2.6 percent above the 30-day average.
The Topix has fallen about 12 percent since March 27, as investors refocused on Europe’s debt crisis and as slowing Chinese growth and signs of weakness in the U.S. recovery weighed on global equities.
Futures on the Standard & Poor’s 500 Index (SPX) fell 1 percent today. The gauge sank 1.6 percent in New York on May 4 after a report showed payrolls missed estimates by climbing 115,000 in April, the smallest gain in six months, as the labor force contracted.
Concern on Europe’s debt crisis also pushed stocks down as Socialist Francois Hollande was elected French president and Greek voters flocked to anti-bailout parties, stoking concern austerity efforts to tackle debt in Europe may be derailed as discontent rises amid slowing growth.
Konica Minolta (4902) fell 3.9 percent to 619 yen. Sony Corp., which depends on Europe for more than a fifth of its sales, slid 4.5 percent to 1,213 yen.
“There’s concern that the European debt problem may get serious,” said Toshiyuki Kanayama, a market analyst at Tokyo- based Monex Inc. “The U.S. job recovery is getting sluggish, fueling concern that it may have a bad impact on consumer spending and housing markets.”
Honda sank 5.6 percent to 2,660 yen. Toyota Motor Corp., Asia’s largest automaker, fell 3 percent to 3,110 yen. The two carmakers were the most active stocks by value in Japan today.
The euro fell to its lowest against the yen in almost three months, weakening to as low as 103.24 yen today in Tokyo, compared with 106.20 yen at the close of stock trading on May 2, the last day Japanese markets were open. The dollar depreciated to 79.65 yen from 80.37 yen, cutting the value of overseas income at some Japanese companies.
Online game operators declined after the Yomiuri newspaper reported Japan’s Consumer Affairs Agency concluded item collection sales system used by some social-network game operators violates the law and plans to ask such companies to stop using the “questionable” sales methods.
Gree plunged by its daily limit of 500 yen, or 23 percent, to 1,651 yen. DeNA Co. (2432) tumbled 20 percent to 1,990 yen. Konami Corp., which produces games for social networks, lost 18 percent to 1,890 yen, the biggest drop on the Nikkei 225.
Energy companies declined after oil fell to its lowest level in more than four months. Inpex Corp. (1605), the nation’s largest oil explorer by market value, slid 5.3 percent to 499,000 yen. Japan Petroleum Exploration Co. slipped 5.4 percent to 3,425 yen.
Crude for June delivery retreated as much as 3.2 percent to $95.34 a barrel in electronic trading in New York today. On May 4, oil fell below $100 a barrel for the first time in three months.
Metal producers also fell after the London Metal Exchange Index of prices for six industrial commodities including copper and aluminum fell 0.4 percent on May 4.
Pacific Metals Co., which manufactures ferronickel, tumbled 7.5 percent to 371 yen. Nippon Light Metal Co. (5701), an aluminum producer, retreated 6.7 percent to 112 yen.
-- With assistance from Satoshi Kawano in Tokyo. Editors: Jim Powell, Jason Clenfield.
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