Japan stocks hammered by Japan Airlines worries

December 30, 2009 03:46 pm | Updated November 17, 2021 06:59 am IST - Tokyo

A Japanese businessman walks past a stock indicator in Tokyo. The Nikkei 225 fell 91.62 points on Wednesday. File photo: AP.

A Japanese businessman walks past a stock indicator in Tokyo. The Nikkei 225 fell 91.62 points on Wednesday. File photo: AP.

Japanese stocks ended the year on a downbeat note on Wednesday as nervous investors continued to unload shares of struggling Japan Airlines Corp.

The benchmark Nikkei 225 stock average fell 91.62 points, or 0.9 percent, to 10,546.44 in choppy trading. The broader Topix index retreated 0.9 percent to 907.59.

Speculation about the fate of Japan’s biggest airliner overshadowed the yen’s depreciation against the dollar, which helped bolster some blue—chip exporters.

JAL shares nosedived 24 percent to a record low finish of 67 yen after Kyodo News agency reported that a government—backed corporate turnaround body has proposed the airline file for bankruptcy while restructuring. But the Yomiuri daily, Japan’s top—selling newspaper, said JAL’s banks rejected the liquidation proposal.

“With recent reports saying the airline could face bankruptcy, investors were panicking their JAL stock ownership could be worthless,” said Masatoshi Sato, market analyst at Mizuho Investors Securities Co. Ltd.

Shares of JAL’s major lenders also fell, with Mitsubishi UFJ Financial Group Inc. down 0.4 percent at 452 yen and Mizuho Financial Group Inc. finishing 0.6 percent lower at 166 yen.

Among gainers, Hitachi Ltd. jumped 3.7 percent to 284 yen, and Mazda Motor Corp. edged up 0.5 percent to 212 yen.

The day’s anxieties close out a year defined by uncertainty.

The Nikkei climbed 19 percent over the last 12 months - solid, but not as robust as other major markets in Asia. Hong Kong’s Hang Seng index surged about 50 percent in 2009, while China’s benchmark soared some 76 percent. The Dow Jones industrial average rose about 20 percent.

A rebound in exports and factory production helped pull the world’s second—biggest economy out of recession earlier this year. Stock prices managed to recover after the Nikkei hit a 26-year-low of 7,021.28 on March 10.

But confidence remains shaky. Deflation threatens to undermine Japan’s recovery, and exporters could see profits shrink if the dollar doesn’t gain back more ground against the yen.

“Coming off the Lehman shock, this year’s market represented a blend of rebound hopes and anxiety,” said Motomi Hiratsuka, head of sales trading at BNP Paribas in Tokyo. “On one hand, there was considerable movement toward normalization. But even if we say the market is improving, it will never go back to the way it was.”

In currencies on Wednesday, the dollar rose to 92.08 yen from 92.02 yen. The euro fell to $1.4349 from $1.4355.

Wednesday was the last trading day of the year. Japanese financial markets will reopen Jan. 4.

0 / 0
Sign in to unlock member-only benefits!
  • Access 10 free stories every month
  • Save stories to read later
  • Access to comment on every story
  • Sign-up/manage your newsletter subscriptions with a single click
  • Get notified by email for early access to discounts & offers on our products
Sign in

Comments

Comments have to be in English, and in full sentences. They cannot be abusive or personal. Please abide by our community guidelines for posting your comments.

We have migrated to a new commenting platform. If you are already a registered user of The Hindu and logged in, you may continue to engage with our articles. If you do not have an account please register and login to post comments. Users can access their older comments by logging into their accounts on Vuukle.