Japanese Stocks Fall; Nikkei 225, Topix Decline for Third Week

By Akiko Ikeda and Kotaro Tsunetomi

Nov. 13 (Bloomberg) -- Japanese stocks fell, dragging benchmark indexes to a third consecutive weekly decline, after crude-oil and metal prices slumped and companies reported losses.

Nippon Mining Holdings Inc., an oil refiner and Japan’s biggest copper producer, sank 1.4 percent after oil retreated yesterday in New York to a four-week low and metals slid in London. Japan Petroleum Exploration Co. lost 2.9 percent. Nippon Sheet Glass Co. plunged 8.2 percent, the steepest drop in the Nikkei 225 Stock Average, after the glassmaker reported a loss. Central Glass Co. tumbled 6.8 percent after reporting a half- year loss and cutting its full-year profit forecast in half.

“Lower commodity prices illustrate anxiety about the economy,” said Kiyoshi Ishigane, a strategist in Tokyo at Mitsubishi UFJ Asset Management Co., which oversees about $56 billion.

The Nikkei 225 fell 0.4 percent to 9,770.31 at the 3 p.m. market close in Tokyo. The broader Topix index retreated 0.1 percent to 866.80, the lowest close since July 15, with about three stocks declining for every two that advanced.

Losses widened to 0.2 percent this week for the Nikkei and 0.8 percent for the broad gauge. The Topix has drifted between gains and losses in seven of the past eight sessions. Closing levels have moved less than 1 percent on 22 of the 30 trading days since Oct. 1, reducing its 30-day volatility to the lowest level since August 2007, according to data compiled by Bloomberg.

The index has fallen 11 percent since Yukio Hatoyama was elected as Japan’s prime minister on Aug. 30. That’s the second- biggest drop among 89 benchmarks tracked by Bloomberg worldwide. Equities in the Japanese measure trade at 36 times estimated earnings, more than double the 17 times for the MSCI World Index.

Shrinking Economy

Investors have shunned stocks on concern the new government will struggle to revive growth after the global recession sapped demand for companies’ products and the stronger yen hurt earnings at exporters.

Japan’s economy will shrink 5.4 percent this year, faster than contractions of 2.7 percent expected in the U.S. and 4.2 percent in the euro area, according to forecasts released on Oct. 1 by the International Monetary Fund.

In New York yesterday, the Standard & Poor’s 500 Index slid 1 percent from a 13-month high the previous day, dragged down by energy producers on a bigger-than-estimated increase in oil stockpiles.

Crude oil for December delivery fell 3 percent to $76.94 a barrel on the New York Mercantile Exchange yesterday, the lowest settlement since Oct. 14. The Energy Department report showed supplies of crude oil rose 1.76 million barrels to 337.7 million last week. Analysts surveyed by Bloomberg News forecast a 1 million-barrel gain.

Oil, Metals

Nippon Mining dropped 1.4 percent to 366 yen. AOC Holdings Inc., an oil and gas explorer declined 2.3 percent to 606 yen. Japan Petroleum Exploration sank 2.9 percent to 4,360 yen, its lowest in more than five weeks.

The London Metals Index, a measure of six metals including copper and zinc, dropped 0.8 percent yesterday, its steepest slump this week.

Nippon Sheet Glass tumbled 8.2 percent to 256 yen. The glassmaker posted a first-half net loss of 26.2 billion yen, compared with a year-earlier profit, as sales fell 32 percent.

Central Glass plunged 6.8 percent to 370 yen, losing the most in 10 months. The company cut its full-year forecast for net income in half, citing a slump in sales and losses related to inventory. It booked a first-half loss of 451 million yen, missing the profit of 200 million yen it expected.

Nippon Suisan Kaisha Ltd. jumped 7.6 percent to 268 yen, the steepest advance in the Nikkei 225. The seafood company was boosted to “buy” from “underperform” by Ritsuko Tsunoda, a Tokyo-based analyst at Bank of America Corp.’s Merrill Lynch & Co. unit on the outlook for a recovery in earnings.

Sharp Corp. advanced 3.8 percent to 1,001 yen, rising the most since July 30. Japan’s biggest maker of liquid-crystal displays was lifted to “buy” from “hold” by Yasuo Nakane, an analyst at Deutsche Bank AG.

To contact the reporters for this story: Akiko Ikeda in Tokyo at iakiko@bloomberg.net; Kotaro Tsunetomi at ktsunetomi@bloomberg.net.