Most Japan Stocks Fall, Led by Inpex on Crude; Brokerages Gain

Most Japan Stocks Fall, Led by Inpex on Crude; Brokerages Gain

By Patrick Rial

July 18 (Bloomberg) -- Most Japanese stocks fell, led by oil explorers after crude prices fell to a one-month low yesterday. Brokerages and banks gained amid confidence they'll fare better than U.S. and European rivals.

Inpex Holdings Inc., Japan's biggest oil explorer, sank to the lowest in more than two months after crude declined 11 percent in three days. Sony Corp. led electronics producers lower on concern the global economy is weakening. Nomura Holdings Inc., Japan's largest brokerage, rose to the highest in two weeks, helped by its plans to expand operations in India.

The Topix lost 1.61, or 0.1 percent, to 1,262.04 as of 1:08 p.m. in Tokyo, after rising as much as 1.1 percent. About three shares fell for every two that gained on the benchmark. The Nikkei 225 Stock Average was little changed at 12,887.69. Volume on the main board of the Tokyo bourse was 853 million shares in the morning session, the second-lowest this week.

``The drop in oil strikes me as negative as it indicates the global economy is faring worse than had been hoped,'' said Mitsushige Akino, who manages about $560 million at Ichiyoshi Investment Management Co. in Tokyo as chief investment officer. ``With low volumes and ongoing worries about earnings, the market will continue to be volatile.''

The Nikkei is headed for a 1.3 percent drop in the last five days, while the Topix is set to fall 1.9 percent. Both gauges have declined for the past six weeks, which is the Topix's longest losing streak since September 2001.

Crude Oil

Inpex slumped 4.3 percent to 1.12 million yen. Japan Petroleum Exploration Co., the nation's second-biggest oil explorer, lost 3.2 percent to 6,600 yen, a fifth day of declines. Inpex also fell after saying costs for a liquefied natural gas venture in Australia have become ``breathtaking.''

Crude oil for August delivery tumbled 4 percent to $129.29 a barrel in New York, the lowest since June 5, bringing its three- day slide to 11 percent.

Sony, the maker of the PlayStation 3 game console, lost 2.1 percent to 4,300 yen. Matsushita Electric Industrial Co., the world's largest maker of consumer electronics, declined 1.4 percent to 2,145 yen.

Manufacturing in the Philadelphia region shrank in July for an eighth-straight month as orders and employment sank, adding to evidence the U.S. economy has yet to begin a recovery. Meanwhile, China's economy grew 10.1 percent in the second quarter, the government said yesterday, the slowest pace since 2005.

Nomura climbed 1.3 percent to 1,551 yen, the highest since July 7. Mitsubishi UFJ Financial Group Inc., the country's biggest lender by value, gained 1.3 percent to 967 yen.

Gains Limited

Nomura said it plans to increase its India staff fivefold in the next two years, at a time when many Western banks are cutting staff. That followed an announcement yesterday by rival Daiwa Securities Group Inc. it will ally with Banco Itau Holding Financeira SA, Brazil's largest financial group. Meanwhile, Mitsubishi UFJ said on July 4 it's considering a ``major investment,'' which analysts speculated may be a U.S. bank.

JPMorgan Chase & Co. rose 14 percent yesterday after the largest U.S. bank by market value said second-quarter earnings were 54 cents per share beating estimates. Meanwhile, Merrill Lynch & Co. reported a quarterly loss larger than any analyst estimate collected by Bloomberg, as it posted more writedowns. Its shares fell 6.1 percent in late trading, pushing the Standard & Poor's 500 Index futures down by as much as 0.8 percent.

About $14 trillion has been wiped off the value of global equities since October as almost $423 billion in credit-related losses prolong the global economy's slump and rising commodity prices stoke inflation.

To contact the reporter for this story: Patrick Rial in Tokyo at prial@bloomberg.net.