Most Japan Stocks Fall, Led by Shipping Lines; Steelmakers Gain

By Patrick Rial and Satoshi Kawano

July 14 (Bloomberg) -- Most Japanese stocks fell, led by shipping lines after cargo rates for commodities fell. Steelmakers advanced after a South Korean producer raised its earnings forecast.

Mitsui O.S.K. Lines Ltd., Japan's second-largest shipping line by sales, fell the most in almost two weeks. Daiichi Sankyo Co. dropped the most in four months after its Indian buyout target was probed for falsification of data on generic drugs. JFE Holdings Inc., the world's third-largest steelmaker, soared after South Korea's Posco said demand from China helped profit climb last quarter.

The Nikkei 225 Stock Average fell 38.94, or 0.3 percent, to 13,000.75 as of 1:59 p.m. in Tokyo, erasing a 1.1 percent gain. The broader Topix index dipped 3.34, or 0.3 percent, to 1,282.57. Seventeen of 33 industry groups on the Topix sank.

Mitsui O.S.K. fell 2.6 percent to 1,410 yen, the biggest drop since July 2. Market leader Nippon Yusen K.K. dropped 2 percent to 953 yen. The Baltic Dry Index, a measure of shipping costs for commodities, tumbled on Friday for the first time since July 4.

Daiichi Sankyo, Japan's third-biggest drugmaker, sank 4.8 percent to 3,010 yen, the steepest slump since March 17 and the Nikkei's second-biggest decline. India's Ranbaxy Laboratories Ltd., set to be acquired by Daiichi, is being probed by U.S. courts for falsifying data and failing to meet quality controls on generic drugs.

JFE Holdings jumped 5.4 percent to 5,460 yen, its steepest advance since April 25. Nippon Steel Corp., the world's second- biggest steelmaker, gained 3.6 percent to 582 yen.

Posco, Asia's third-biggest steelmaker, said second-quarter profit rose 34 percent after increasing prices as demand from automakers and shipbuilders rose. Also, ArcelorMittal, the world's biggest steelmaker, and ThyssenKrupp AG are seeking to renegotiate steel contracts with Nissan Motor Co. and other automakers, NHK television said on July 12. JFE and Nippon Steel have been raising prices in order to offset material costs.

To contact the reporters for this story: Patrick Rial in Tokyo at prial@bloomberg.net; Satoshi Kawano in Tokyo at skawano1@bloomberg.net