Tokyo shares sink by close as firms go ex-dividend

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TOKYO: Tokyo shares closed lower on Wednesday as more than half the firms on the Topix index traded without the right to a September dividend payment.

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A strong yen also hit exporters, from Toyota to Uniqlo operator Fast Retailing, while energy shares were under pressure ahead of the start of a key OPEC oil cartel meeting.

Tokyo’s drop followed a global rally Tuesday as Hillary Clinton was judged to have won the first presidential debate with Republican rival Donald Trump — the Democrat is widely seen as a safer pair of hands politically and economically.

At the close, Tokyo’s benchmark Nikkei 225 index was down 1.31 percent, or 218.53 points, at 16,465.40, after rallying the previous day.

The broader Topix sank 1.37 percent, or 18.45 points, to 1,330.77 with nearly 1,100 of the broad index’s 1,966 members going ex-dividend.

Trading on an ex-dividend basis means investors who buy shares today are not entitled to the next dividend payment. Many Japanese stocks trade ex-dividend on the same day in March and September.

“With big events behind us, and ahead of quarterly corporate earnings reports, participants are devoid of a mindset for any active stock investing,” said Chihiro Ohta, a Tokyo-based senior strategist with SMBC Nikko Securities.

“As for the yen, the bigger trend is for the currency to strengthen,” Ohta told Bloomberg News.

A stronger yen is bad for Japanese shares as it tends to hurt the profitability of key exporters.

On Wednesday, the dollar was slightly stronger at 100.59 yen against 100.36 yen in New York but still off levels seen earlier Tuesday in Asia.

Toyota tumbled 2.36 percent to 5,872 yen while rival Nissan closed 2.57 percent lower at 1,001.5 yen. Fast Retailing fell 1.11 percent to 32,040 yen.

Banks have been under pressure after Deutsche Bank, Germany’s biggest lender, hit a record low this week on reports that Berlin had refused state aid for the embattled lender facing a multibillion-dollar fine in the United States.

Sumitomo Mitsui Financial Group dived 4.08 percent to 3,408 yen while Nomura lost 3.68 percent to close at at 441.6 yen.

Energy explorer Inpex fell 1.48 percent to 857.3 yen as crude prices struggled to recover from losses of almost three percent Tuesday on worries about the chances of an agreement when OPEC and Russia meet to discuss a supply glut and production crisis.

Bucking the downtrend, Toshiba jumped 4.89 percent to close at 344.9 yen after the company more than doubled its April-September operating profit outlook.

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