Crisis-hit Toshiba falls, drags on Tokyo shares

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TOKYO: Toshiba shares plunged to their lowest level in nearly seven years on Tuesday after it warned of a $4.5 billion annual loss and layoffs following an embarrassing profit-padding scandal, dragging Tokyo’s benchmark stock index lower.

Crisis-hit Toshiba said after markets closed on Monday it would book the record loss and cut thousands of jobs, with the stock dropping nearly 10 percent that day after weekend reports of the shortfall.

The shares tumbled another 12.28 percent on Tuesday to finish at 223.5 yen.

Toshiba’s stock is worth less than half its value before revelations earlier this year that executives pressured underlings to falsely inflate profits to hide poor results.


In other trading, McDonald’s Japan dropped 7.84 percent to 2,712 yen as the Nikkei business daily said its US parent wants to sell as much as one-third of its shares in the struggling unit.

The division has been hit by losses and a series of food contamination scandals.

Tokyo’s lacklustre performance on Tuesday came after the three main US stock indexes booked solid gains, shrugging off another new multi-year low in oil prices.

“Ahead of the holidays, it’s hard to expect to receive a decent return for taking risk,” Nobuyuki Fujimoto, a senior market analyst at SBI Securities Co, told Bloomberg News.

“Japanese stocks are no longer relatively expensive, so I wouldn’t expect big declines. But they’re also unlikely to move much higher.”

The Nikkei 225 at the Tokyo Stock Exchange fell 0.16 percent, or 29.32 points, to close at 18,886.70.

The broader Topix index of all first-section shares ticked up 0.15 percent, or 2.32 points, to 1,533.60.

Exporters were under pressure as the yen held its gains. The dollar was at 121.23 yen against 121.21 yen on Monday in New York but well down from levels above 123 yen last week.

Sony fell 1.01 percent to 2,913 yen, electronics parts giant Murata Manufacturing was down 0.61 percent at 16,885 yen and Uniqlo operator Fast Retailing, a market heavyweight, sank 1.18 percent to 43,230 yen.

Banking giant Mitsubishi UFJ rose to 1.01 percent to 756.4 yen, while rival Mizuho Financial Group edged up 0.04 percent to 241.5 yen.

Japan Airlines gained 2.64 percent to 4,342 yen and All Nippon Airways advanced 1.65 percent to 350.5 yen thanks to weak oil prices, which mean lower fuel costs for the carriers.

AFP

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