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Market Update

Nikkei Drops 1% on 7-Year Low Oil, Toshiba Faces Record Fine

Author: Hiruki Nakamura
Last Update: 7:15 AM ET December 08 2015

4:30 PM Tokyo – Stocks in Tokyo declined as low commodity prices dragged down energy and mining shares and crude oil prices declined to a 7-year low. The gross domestic product was revised to 1% expansion in the third quarter and the current account surplus in October widened.

The Nikkei 225 average declined as falling oil and commodity prices pulled mining and energy shares lower, despite the GDP was revised to expansion from the previous estimate of contraction.

Crude oil prices tumbled after the Organization of Petroleum Exporting Countries decided not to decrease output at least until June 2016 at the latest meeting on Friday.

Energy explorer Inpex, oil refiner JX Holdings, and energy services firm JGC saw the largest declines.

On the positive side, Japan’s gross domestic product expanded at an annual rate of 1% in the third quarter, compared with a preliminary estimate of 0.8% decline, according to the Cabinet office release.

The current account surplus in October widened 72% to 1.46 trillion yen from a year ago, the Ministry of Finance reported.

Exports in October declined 3.7% while imports plunged 16.4%.

Overall, bank lending in November jumped 2.3% to 492.60 trillion yen from a year ago, the Bank of Japan said.

Toshiba is likely to pay a record fine of 7.37 billion yen for accounting fraud, following the recommendation of the Securities and Exchange Surveillance Commission.

The Nikkei 225 Stock Average declined 205.55 or 1% to 19,492.60 and the broader Topix index slumped 16.48 to 1,568.73.

The yen strengthened against the dollar, up 0.2% to 123.12.

Stocks in Review

Asante Inc edged up 0.06% to 1,588 yen after the house amenities services provider said total sales in November increased 3% to 1.04 billion yen from a year ago, but declined 11.9% from October.

Pigeon Corporation declined 5% to 3,220 yen after the childcare and nursing products maker said China and Hong Kong sales in the third-quarter fell by more than 30% due to inventory adjustments.

Total revenues in the quarter soared 11.7% from a year ago to 68.32 billion yen, while net income surged 22.1% to 7.79 billion yen compared to the previous year.

Pigeon expects net sales for the year to jump 13.5% to 95.50 billion yen and net income to advance 13.6% to 9.60 billion yen.

Toshiba Corporation dropped 3% to 293 yen after regulators in Japan recommended a record fine of 7.37 billion yen for accounting fraud.

The recommendation came from the Securities and Exchange Surveillance Commission to the Financial Services Agency.

Separately, 50 individual shareholders initiated a lawsuit against the company and the former management, seeking 302 million yen in damages for the falsified accounting.

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