Japan's Nikkei Index Declines a Ninth Day, Led by Developers

By Masaki Kondo and Makiko Kitamura

July 1 (Bloomberg) -- Japan's Nikkei 225 Stock Average fell in its longest losing streak in almost four years on concern higher materials costs and lower demand will dent profit at real estate companies. Trading houses and utilities rose as slumping business confidence prompted investors to buy stocks that can withstand a slowing economy.

Tokyo Tatemono Co. sent a gauge of developers to a three- month low after the company cut its earnings forecast. Mitsubishi Corp., which earns half its profit from commodities, led a gain by trading companies after the Tankan index of manufacturer sentiment fell a third quarter, though less than economists estimated. Tokyo Electric Power Co., Asia's biggest utility, jumped to the highest in three months.

The Nikkei 225 Stock Average dipped 18.18, or 0.1 percent, to close at 13,463.20 in Tokyo, falling for a ninth-straight day, the longest losing streak since September 2004. The Topix index fell 0.03, or less than 0.1 percent, to close at 1,320.07.

``Even though business sentiment came in better than anticipated, a gain in defensive stocks shows investors don't buy it,'' said Kiyoshi Ishigane, a Tokyo-based senior strategist at Mitsubishi UFJ Asset Management Co., which oversees about $61 billion. ``The economy is in a downward trend.''

The Tankan index slid to 5 points in June from 11 in March, the Bank of Japan said today. Economists had estimated the gauge would fall to 3. Large companies expect profits to drop 7 percent in the year to March 31, compared with a 0.3 percent increase predicted three months ago.

Trading volume on the bourse was the thinnest since June 24.

To contact the reporters for this story: Masaki Kondo in Tokyo at mkondo3@bloomberg.net; Maki Kitamura in Tokyo at mkitamura1@bloomberg.net.
Last Updated: July 1, 2008 02:22 EDT