Nikkei ends up 1.1 percent

16 Oct, 2008

The Nikkei average reversed course and rose 1.1 percent on Wednesday as a sense of panic over the financial crisis eased, though worries about the global economy and company earnings sent the market lower in earlier trade. So-called defensive stocks such as drugmakers including Takeda Pharmaceutical Co helped buoy the market, though exporters such as Sony Corp slid amid worries about the global economy and also after sharp gains.
Mazda Motor tumbled more than 9 percent after a report that it has scrapped plans to build a second US factory amid deteriorating sales. "The worst is probably over for now after the markets confirmed that governments have decided not to let banks fail as they announced a series of measures," said Soichiro Monji, a chief strategist at Daiwa SB Investments. "The gains are still due to short-covering, but we are likely to see some rebound for a while after the selling climax last week."
The benchmark Nikkei added 99.9 points to end at 9,547.47. It fell as much as 1.9 percent at one stage. The Nikkei jumped more than 14 percent on Tuesday, the biggest one-day gain in its 58-year history, after losing 24 percent the previous week. The broader Topix dipped 0.08 percent to 955.51.
DRUGMAKERS GAIN, EXPORTERS SLIDE Shares of Takeda jumped 6.2 percent to 4,950 yen, while Astellas Pharma climbed 3.6 percent to 4,040 yen. Convenience store Lawson rose 6 percent to 4,630 yen after saying on Tuesday its first-half operating profit rose to 29.1 billion yen ($287.2 million), up from 25.5 billion yen a year earlier, boosted by a jump in tobacco sales after the introduction of ID-requiring vending machines.
Among the biggest drags on the Nikkei 225 by volume weight were blue chip exporters. Sony slid 4.3 percent to 2,665 yen, while Honda Motor Co dropped 5.2 percent to 2,355 yen and Toyota Motor Corp fell 1.9 percent to 3,650 yen. The president of Toyota said on Wednesday the business environment has deteriorated beyond earlier expectations and predicted the key North American car market would remain sluggish through next year.
Shares of Mazda skidded 9.2 percent to 285 yen. The Nikkei business daily said the deepening downturn in the US market has forced Mazda to drop plans to produce fuel-efficient mid-sized cars and other models from the first half of the next decade, using a shut-down Ford plant or building a new one with Ford. Companies with profit worries also came under pressure.
Shares of Elpida Memory tumbled 14.5 percent to 1,183 yen after it said it would likely post a 40 billion yen half-year operating loss - a much bigger loss than the market had expected. Trade was light on the Tokyo exchange's first section, with 2.51 billion shares changing hands, below last week's daily average of 2.92 billion. Advancing stocks outpaced declining ones 883 to 756.

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