Nikkei closes lower on euro fears

Tue, Jun 19, 2012, 01:00

Japan's Nikkei share average retreated today from the previous day's four-week high as the initially positive reception for Greece's election result was chilled by concerns about Spain's banking sector.

The Nikkei fell 0.8 per cent to 8,655.87 after rallying 1.8 per cent yesterday to hit its highest close since May 22nd.

Sharp was today's standout with a gain of 3.2 per cent after Hon Hai Precision Industry said it was in discussions to increase its stake in the company.

But investor jitters about an intractable euro zone crisis pushed down the overall market.

The market's focus switched to Spain, where bond yields hit a new euro-era high above 7 per cent, a level that led Greece, Ireland and Portugal to seek international bailouts.

Japanese steelmakers were hit by US peer AK Steel Holdings forecasting a second-quarter profit that fell short of analysts' expectations and refusing to issue full-year guidance because of market volatility.

Osaka Steellost 7.3 per cent, while Mitsubishi Steel and JFE Holdings dropped 4 per cent and 2.3 per cent respectively.

Tokyo Steel Manufacturing Co Ltd, also hurt by its plan to drop prices for all contracts signed in July, shed 4.2 per cent.

The broader Topix index fell 0.6 per cent to 734.69 in low volume, with the number of shares trading hands at just 69.2 per cent of its 90-day average.

Low liquidity continued to plague the market, leaving it vulnerable to large swings.

Reuters