Tokyo stocks flat after shippers sink

Japan’s Topix stock index fell on Thursday, hit by sell-offs in recently strong sectors such as shipping and real estate. By the end of trading, the Topix had declined 0.5 per cent to 1,720.18.

But the Nikkei 225 index ended virtually unchanged at 17,292.48, buoyed by mild strength among the shares of heavy exporters in response to a slightly weaker yen.

The most spectacular fall of the day was in the shipping sector, which dropped 5.1 per cent.

Nippon Yusen, Japan’s largest shipper, plunged 7.8 per cent to Y904 after the company cut its forecast for group operating profit for the year ending in March. Mitsui OSK Lines, its largest rival, declined 3.5 per cent to Y1,225 after leaving its forecast for annual group operating profit unchanged at Y166bn. Kawasaki Kisen, the third biggest shipping company, dropped 4.2 per cent to Y1,044 despite raising its forecast for group operating profit to Y61bn from Y60bn.

Market expectations had been extremely high, with many investors expecting shippers to raise their profit forecasts because of weaker oil prices. The sector has risen more than 50 per cent since the summer.

The export-focused electrical machinery sector advanced 0.5 per cent. Advantest, the chip equipment maker, climbed 2.2 per cent to Y5,570.

Transport equipment, another sector heavily dependent on overseas demand, rose 0.3 per cent, with Honda Motor closing 1.7 per cent higher at Y4,710.

Chugai Pharmaceutical leapt 6.2 per cent to Y2,835 after Roche, the Swiss healthcare group that owns half the company, said it might raise its stake. Chugai also benefited from Nikko Citigroup’s move to upgrade its rating on the drugmaker’s shares to “buy” from “hold”. That came after Chugai said it expected net profit to fall 19 per cent to Y31bn this year, but Nikko Citigroup said Chugai’s forecasts were too conservative.

Mitsumi Electric, an electronics parts maker, jumped 14.9 per cent to Y3,090 after raising its group net profit forecast by 59 per cent, citing strong sales of Nintendo’s Wii game console.

NTT DoCoMo, Japan’s biggest mobile carrier, continued its sudden strong rise after months of share price stagnation, gaining 4.4 per cent to close at Y215,000. Some analysts have argued that DoCoMo’s shares have been punished too much for its poor showing in subscriber numbers since number portability arrived in October.

Although DoCoMo has lost subscribers to rival KDDI, the exodus has not been as large as many had expected. The latest monthly subscriber figures came out on Wednesday. KDDI, which gained the most customers in January, moved up 1.8 per cent to Y925,000.

Copyright The Financial Times Limited 2017. All rights reserved. You may share using our article tools. Please don't copy articles from FT.com and redistribute by email or post to the web.