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July 19, 2013, 4:33 a.m. EDT

Japan stocks hit in volatile trade; China slides

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By V. Phani Kumar, MarketWatch

HONG KONG (MarketWatch) — Japanese shares beat a sharp retreat after opening comfortably higher on Friday, with a wave of selling ahead of weekend elections in the country also dragging on other regional markets.

The Nikkei Stock Average /zigman2/quotes/210597971/delayed JP:NIK -3.67%  ended 1.5% lower after witnessing extreme volatility during the session. The benchmark rose nearly 1% in the morning session before suffering heavy losses that dragged the benchmark down to a loss of 2.7% at one point, which traders attributed to selling in the futures market but not related to any particular news.


Tokyo Stock Exchange Enlarge Image
Japan shares take a sudden tumble amid selling on the stock futures market.

“It’s just positioning. ... The market was long, and the Nikkei Stock Average has failed to break significantly higher despite the fact that the Standard & Poor’s 500 breached its May highs. ... [The rule for traders is], if you don’t like the move, you get out,” said Ben Collett, head of Asian equities at Sunrise Brokers.

“There was no smoking gun that we could see, although looking at volumes in the futures market in the two hours when we saw the cash market fall, 55,800 contracts were traded, which is huge, given the average for each whole day has been 54,000 contracts,” said Chris Weston, chief market strategist at IG Markets.

Meanwhile, the Shanghai Composite /zigman2/quotes/210598127/delayed CN:SHCOMP -3.71% tumbled 1.5% amid lingering worries over the economy and the lack of policy action to stimulate growth.

Australia’s S&P/ASX 200 /zigman2/quotes/210598100/delayed AU:XJO -3.25% lost 0.4% and South Korea’s Kospi /zigman2/quotes/210598069/delayed KR:180721 -3.30%  ended 0.2% lower, while Hong Kong’s Hang Seng Index /zigman2/quotes/210598030/delayed HK:HSI -2.59% inched up 0.1%.

The volatility in Tokyo came ahead of the country’s upper house elections this weekend, in which the ruling Liberal Democratic Party is expected to easily clinch a majority. The LDP already has a majority in the lower house of the parliament, and a majority in the upper chamber of the Diet would strengthen Prime Minister Shinzo Abe’s government in its attempt to revive the Japanese economy.

However, “it will not be plane sailing once the voting is out of the way. The politicians could be forgiven for putting off difficult decisions until after the elections, but hard choices will have to be made soon to maintain the markets’ confidence,” Capital Economics wrote in a report.

Regional markets began the day on a positive note after the Dow Jones Industrial Average /zigman2/quotes/210598065/realtime DJIA -4.42%  and the Standard & Poor’s 500 Index /zigman2/quotes/210599714/realtime SPX -4.42%  ended at record highs Thursday on Wall Street.

Those gains came after the second day of congressional testimony from Federal Reserve Chairman Bernanke and some upbeat earnings results, including from Morgan Stanley /zigman2/quotes/209104354/composite MS -3.87% . Moody’s Investors Service also lifted its outlook on U.S. credit ratings to stable, while reaffirming the country’s AAA sovereign rating.

Stocks across sectors were affected by the volatility in Tokyo trading. Shares of Tokyo Electron Ltd. /zigman2/quotes/202883609/delayed JP:8035 -5.52%   /zigman2/quotes/206919677/delayed TOELY -4.00% slumped 5.7%, Tokyo Electric Power Co. /zigman2/quotes/202771076/delayed JP:9501 -3.07% /zigman2/quotes/205839055/delayed TKECY +1.24% sank 1.2%, and Isuzu Motors Ltd. /zigman2/quotes/202637468/delayed JP:7202 -2.54% /zigman2/quotes/206362374/delayed ISUZY -3.36%  fell 2.1%, with each of them reversing early gains.

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Sharp Corp. /zigman2/quotes/203224600/delayed JP:6753 -5.05% /zigman2/quotes/200401218/delayed SHCAY -4.45%  came off early highs but ended up 0.9% after the Nikkei newspaper reported it was considering raising funds via a private placement to Lixil Group Corp. /zigman2/quotes/201123499/delayed JP:5938 -6.74%  and Makita Corp. /zigman2/quotes/200319105/delayed JP:6586 -2.61% .

Shares of Lixil added 0.8%, and Makita fell 2.4%.

Hong Kong shares were supported as heavyweight stock HSBC Holdings PLC /zigman2/quotes/202687335/delayed HK:5 -2.30%   rose 1.2% after the higher finish on Wall Street.

But Chinese property developers suffered big losses, with China Overseas Land & Investment Ltd. /zigman2/quotes/205731176/delayed HK:688 -2.24%   /zigman2/quotes/202573805/delayed CAOVY -2.27% sliding 2.1% and Beijing North Star Co. /zigman2/quotes/209265368/delayed HK:588 -2.28%  sliding 2.9% in Hong Kong. On mainland Chinese bourses, Poly Real Estate Group Co. /zigman2/quotes/201864015/delayed CN:600048 +2.27%  skidded 5.6% in Shanghai and the yuan-denominated A-shares of China Vanke Co. fell 5.5% in Shenzhen.

Santos Ltd. /zigman2/quotes/207349564/delayed AU:STO -2.57% fell 3.7% after reporting a decline in production and cutting forecasts for oil and gas output.

/zigman2/quotes/210597971/delayed
JP : Nikkei
21,142.96
-805.27 -3.67%
Volume: 0.00
Feb. 28, 2020 3:15p
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/zigman2/quotes/210598127/delayed
CN : China: Shanghai
2,880.30
-111.03 -3.71%
Volume: 40.12B
Feb. 28, 2020 3:01p
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/zigman2/quotes/210598100/delayed
AU : S&P ASX
6,441.20
-216.70 -3.25%
Volume: 1.52M
Feb. 28, 2020 5:29p
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/zigman2/quotes/210598069/delayed
KR : Korea Exchange
1,987.01
-67.88 -3.30%
Volume: 660,093
Feb. 28, 2020 3:33p
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/zigman2/quotes/210598030/delayed
HK : Hong Kong Exchange
26,084.64
-693.98 -2.59%
Volume: 2.10M
Feb. 28, 2020 3:15p
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/zigman2/quotes/210598065/realtime
US : Dow Jones Global
25,766.64
-1,191 -4.42%
Volume: 670.37M
Feb. 27, 2020 5:20p
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/zigman2/quotes/210599714/realtime
US : S&P US
2,978.76
-137.63 -4.42%
Volume: 3.94B
Feb. 27, 2020 5:20p
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/zigman2/quotes/209104354/composite
US : U.S.: NYSE
$ 45.41
-1.83 -3.87%
Volume: 26.82M
Feb. 27, 2020 6:30p
P/E Ratio
8.76
Dividend Yield
3.08%
Market Cap
$69.59 billion
Rev. per Employee
$831,709
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/zigman2/quotes/202883609/delayed
JP : Japan: Tokyo
¥ 22,325.00
-1,305 -5.52%
Volume: 2.42M
Feb. 28, 2020 3:00p
P/E Ratio
18.77
Dividend Yield
2.41%
Market Cap
¥3674.47 billion
Rev. per Employee
¥110.09M
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/zigman2/quotes/206919677/delayed
US : U.S.: OTC
$ 52.80
-2.20 -4.00%
Volume: 108,422
Feb. 27, 2020 3:59p
P/E Ratio
19.36
Dividend Yield
1.97%
Market Cap
$33.41 billion
Rev. per Employee
$997,844
loading...
/zigman2/quotes/202771076/delayed
JP : Japan: Tokyo
¥ 410.00
-13.00 -3.07%
Volume: 13.55M
Feb. 28, 2020 3:00p
P/E Ratio
3.58
Dividend Yield
N/A
Market Cap
¥687.35 billion
Rev. per Employee
¥149.25M
loading...
/zigman2/quotes/205839055/delayed
US : U.S.: OTC
$ 4.08
+0.05 +1.24%
Volume: 0.00
Feb. 25, 2020 5:20p
P/E Ratio
3.89
Dividend Yield
N/A
Market Cap
$6.16 billion
Rev. per Employee
$1.35M
loading...
/zigman2/quotes/202637468/delayed
JP : Japan: Tokyo
¥ 1,016.00
-26.50 -2.54%
Volume: 5.35M
Feb. 28, 2020 3:00p
P/E Ratio
8.62
Dividend Yield
3.74%
Market Cap
¥768.89 billion
Rev. per Employee
¥61.23M
loading...
/zigman2/quotes/206362374/delayed
US : U.S.: OTC
$ 9.20
-0.32 -3.36%
Volume: 59,432
Feb. 27, 2020 3:58p
P/E Ratio
8.53
Dividend Yield
2.72%
Market Cap
$6.99 billion
Rev. per Employee
$554,540
loading...
/zigman2/quotes/203224600/delayed
JP : Japan: Tokyo
¥ 1,260.00
-67.00 -5.05%
Volume: 4.14M
Feb. 28, 2020 3:00p
P/E Ratio
12.87
Dividend Yield
1.98%
Market Cap
¥844.80 billion
Rev. per Employee
¥50.23M
loading...
/zigman2/quotes/200401218/delayed
US : U.S.: OTC
$ 2.90
-0.14 -4.45%
Volume: 46,075
Feb. 27, 2020 3:55p
P/E Ratio
13.52
Dividend Yield
1.00%
Market Cap
$6.41 billion
Rev. per Employee
$454,670
loading...
/zigman2/quotes/201123499/delayed
JP : Japan: Tokyo
¥ 1,620.00
-117.00 -6.74%
Volume: 2.28M
Feb. 28, 2020 3:00p
P/E Ratio
N/A
Dividend Yield
4.32%
Market Cap
¥503.90 billion
Rev. per Employee
¥28.73M
loading...
/zigman2/quotes/200319105/delayed
JP : Japan: Tokyo
¥ 3,735.00
-100.00 -2.61%
Volume: 1.25M
Feb. 28, 2020 3:00p
P/E Ratio
19.82
Dividend Yield
1.66%
Market Cap
¥1061.63 billion
Rev. per Employee
¥30.30M
loading...
/zigman2/quotes/202687335/delayed
HK : Hong Kong
HK$ 53.15
-1.25 -2.30%
Volume: 55.21M
Feb. 28, 2020 3:15p
P/E Ratio
22.48
Dividend Yield
7.48%
Market Cap
HK$1105.07 billion
Rev. per Employee
HK$2.88M
loading...
/zigman2/quotes/205731176/delayed
HK : Hong Kong
HK$ 26.15
-0.60 -2.24%
Volume: 12.57M
Feb. 28, 2020 3:14p
P/E Ratio
6.14
Dividend Yield
3.63%
Market Cap
HK$293.08 billion
Rev. per Employee
HK$30.79M
loading...
/zigman2/quotes/202573805/delayed
US : U.S.: OTC
$ 16.78
-0.39 -2.27%
Volume: 7,599
Feb. 27, 2020 3:45p
P/E Ratio
6.18
Dividend Yield
3.05%
Market Cap
$37.60 billion
Rev. per Employee
$3.93M
loading...
/zigman2/quotes/209265368/delayed
HK : Hong Kong
HK$ 2.14
-0.05 -2.28%
Volume: 2.26M
Feb. 28, 2020 3:09p
P/E Ratio
4.76
Dividend Yield
6.38%
Market Cap
HK$7.51 billion
Rev. per Employee
HK$3.83M
loading...
/zigman2/quotes/201864015/delayed
CN : China: Shanghai
¥ 16.19
+0.36 +2.27%
Volume: 160.96M
Feb. 28, 2020 3:00p
P/E Ratio
8.70
Dividend Yield
3.09%
Market Cap
¥188.90 billion
Rev. per Employee
¥3.42M
loading...
/zigman2/quotes/207349564/delayed
AU : Australia: Sydney
$ 6.83
-0.18 -2.57%
Volume: 15.80M
Feb. 28, 2020 4:10p
P/E Ratio
14.82
Dividend Yield
2.45%
Market Cap
$14.94 billion
Rev. per Employee
$2.29M
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Varahabhotla Phani Kumar is a reporter in MarketWatch's Hong Kong bureau. Follow him on Twitter @MktwKumar.

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