TOKYO, Aug 10 (Reuters) Tokyo stocks are set to drop on Friday after U.S. and European stocks tumbl

By Staff
|
Google Oneindia News

TOKYO, Aug 10 (Reuters) Tokyo stocks are set to drop on Friday after U.S. and European stocks tumbled on signs that the U.S. subprime mortgage market woes are spreading. The only question is: How low will Tokyo go? The Tokyo Stock Exchange's first section logged a record turnover on Thursday, which some market players said was due to large-lot trading by hedge funds who had been hit by U.S.

subprime mortgage woes and were trying to square their positions.

Hiroichi Nishi, a general manager of equity marketing at Nikko Cordial Securities Inc., said the market will see another flurry of selling but may later pare some losses.

"Japanese economic fundamentals are not bad. Stock prices are also at an attractive level," he said.

Yumi Nishimura, a manager in Daiwa Securities SMBC Co. Ltd.'s investment advisory section, said that as Japanese financial institutions appear to have limited exposure to the U.S. subprime sector, the impact on Tokyo stocks will be largely psychological.

"It will be a matter of sentiment," she said.

She expects the Nikkei to hold above 16,652, the four-month low marked last Thursday, but she added that the benchmark won't be able to top 17,000 either.

Nikkei futures traded in Chicago finished the previous session at 16,855.00, 365 points lower than the Osaka close pointing to a heavy drop at the open.

Market participants expect the Nikkei to trade between 16,750 and 16,950 on Friday after closing at 17,170.60 on Thursday.

The Dow Jones industrial slumped 2.8 percent to 13,270.68 and the Nasdaq Composite Index shed 2.2 percent to 2,556.49 on Thursday.

Nikko Cordial Corp. may be in focus after the Nikkei business daily reported that Norinchukin Bank is in talks to buy Nikko Principal Investments Japan Ltd., Nikko Cordial's wholly owned subsidiary, for slightly more than 400 billion yen ($3.4 billion).

STOCKS TO WATCH -- Japan Tobacco Inc.

The world's third-largest cigarette maker, expects to post a 26 percent jump in annual profit due to the inclusion of earnings from its British acquisition the Gallaher Group.

-- Fast Retailing Co. Ltd.

Dubai-based Istithmar is set to buy Jones Apparel Group Inc.'s Barneys New York for $942.3 million after Japanese casual-clothing retailer Fast Retailing on Thursday pulled out of the bidding war.

The move by Fast Retailing ended a month-long tug-of-war between the Dubai-owned private equity firm and the operator of the Uniqlo stores for ownership of the luxury department store chain.

-- Inpex Holdings Inc.

Inpex aims to retain its stake in Kazakhstan's Kashagan oilfield, Director Mutsuhisa Fujii told reporters. Inpex has about an 8 percent stake in the oilfield.

-- Bridgestone Corp.

The top Japanese tyre maker posted a 21.3 percent rise in half-year operating profit as the yen weakened and sales grew, especially in higher-margin segments, and tweaked its recently increased forecasts for the full year.

REUTERS RC VP0512

For Daily Alerts
Get Instant News Updates
Enable
x
Notification Settings X
Time Settings
Done
Clear Notification X
Do you want to clear all the notifications from your inbox?
Settings X
X