Japan shares fall while rest of Asia rises

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Japanese lenders were under severe pressure in Tokyo on Monday following the failure of SFCG, dragging a sub-index of the sector to a record low.

The Topix sub index of non-bank financial companies, including consumer credit companies, slid 6.6 per cent to 158.98, its lowest ever point, according to data available from January 1983.

SFCG, which lent money to small companies and consumers, on Monday filed for bankruptcy protection with liabilities of Y338bn ($3.59bn), sending the stock down 15.5 per cent to Y1,092.

Despite regaining some ground in later trading, the Nikkei 225 missed a broader Asian rally to close down 0.5 per cent at 7,376.16.

The index is edging closer to its late October low of 7,162.90, its lowest since 1982. Orix, a large non-bank lender, slid 13.5 per cent to Y2,060, while consumer lender Takefuji dropped 15.9 per cent to Y393 and Aiful dropped 16.4 per cent to Y107.

The broader Topix slipped 0.6 per cent to 735.28, to its lowest since December 1983.

Toshiba’s shares were also under pressure, following a local report that the company was considering a Y300bn capital injection. The company has yet to decide how to obtain the funds, the report said. Toshiba’s stock dropped 6.5 per cent to Y215, its lowest since at least 1984.

Elsewhere in the region, the Hang Seng gained 3.8 per cent to 13,175.10, as investors took the opportunity to snap up some financial stocks on news that Citigroup is pressing the US government for a fresh capital injection that would take its stake in the bank up to about 40 per cent.

Hang Seng Bank gained 4.4 per cent to HK$85.60, while HSBC rose from its decade-low on Friday, to close 0.9 per cent higher at HK$55.30.

Real Gold Mining which listed on Monday closed the day at its initial offering price of HK$6.25.

The main sub index of mainland Chinese shares traded in Hong Kong gained 3.4 per cent to 7,307.01.

In Shanghai, shares gained 2 per cent to 2,305.777. Property shares gained following a report that the government was mulling its support package for the residential market. Poly Real Estate gained 1.1 per cent to Rmb20.01, while in Shenzen, China Vanke gained 4.7 per cent to Rmb8.10.

Shenzhen Development Bank gained its daily limit of 10 per cent to Rmb14.99 after a separate report said China Development Bank may acquire a portion or the entire bank.

Weichai Power also gained its 10 per cent limit in Shenzhen to Rmb28.49 following a Reuters report that it was planning to buy the assets of French engine maker Moteurs Baudouin, pending government approval.

Gold miners gained following the precious metal’s surge past $1,000 per ounce on Friday. Zijin Mining gained its 10 per cent daily limit to Rmb8.97 and Shandong Gold gained 8.6 per cent to Rmb74.43.

Shares in South Korea recovered after being sharply sold off last week amid concerns over the weight of foreign debt amid the weakening won. The Kospi closed 3.2 per cent higher at 1,099.55, also buoyed by the news about Citi.

Australian shares lost 1.5 per cent to 3,351.2, while in Mumbai the stock market was closed for a holiday.

Singapore shares gained 2.2 per cent to 1,630.69.

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