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Market Update

Nikkei Drop Extends Correction to 15%, Brokers Lead Decliners

Author: Hiruki Nakamura
Last Update: 10:26 AM ET June 03 2013

5:30 PM Tokyo – Market indexes in Japan declined to a five-week low after investors turned cautious on softening Chinese economy and uncertainty related to the U.S. monetary stimulus.

Japanese stocks declined for the second day in a row and the widely followed benchmark indexes dropped more than 3.4%.

The selling continued for the second week and index extended losses for the second day in a row as retail investors begin selling as Japanese markets enter correction.

The Nikkei 225 index declined 3.7% to 13,261.82 and the Topix index dropped 3.4% to 1,096.95.

The Nikkei is down 15% from its peak on May 22 and Topix has declined 14% in the period but the index is still the best performing among developed markets and risen 29% in the year so far.

Market weakness deepened after China reported softer than expected economic data on the weekend and investors turned cautious after weak market closure in the U.S. on Friday.

The yen rebounded and closed at 100.37 against one U.S. dollar.

Stocks in Review

Stocks of securities brokers and real estate companies and banks led the decliners.

Nomura Holdings plunged 8.3% and Daiwa Securities Group fell more than 11%.

Mitsubishi Estate Co., the largest real estate developer declined 7.5% in sympathy with the fall in real estate sector stocks.

SoftBank declined 5% after a shareholder advisory services company recommended investors to reject the company’s offer for SprintNextel Corp.

Fast Retailing declined more than 5%, the stock has the highest weighting in the Nikkei 225 index.

Toyota Motor Corp declined 3.3% as the yen rebounded and traded near its highest level since May 9.

Sources: Data collected by 123jump.com and Ticker.com from company press releases, filings and corporate websites. Market data: BATS Exchange. Inc