Japanese shares fell, with the Nikkei 225 Stock Average entering a correction, as investors weighed corporate earnings and slowing Chinese manufacturing growth increased concern the global economic recovery is faltering.
Hokkaido Electric Power Co. led a decline by utilities after forecasting a 77 billion yen ($754 million) net loss. Daiwa Securities Group Inc., Japan’s second-largest brokerage, lost 4.9 percent even after its third-quarter profit tripled. NGK Insulators Ltd. (5333) jumped 12 percent on raising its operating-income outlook by 24 percent.
The Nikkei 225 slid 2 percent today to 14,619.13, extending its slide from a six-year high reached Dec. 30 to 10 percent and entering a correction. The Topix index sank 2 percent to 1,196.32, its lowest close since Nov. 11. The Standard & Poor’s 500 Index capped a third week of losses Jan. 31 after the Federal Reserve cut stimulus even amid a rout in emerging-market currencies. An official gauge showed on Feb. 1 that growth in Chinese factory output slowed to the least in six months.
“The risk-off mood is pretty strong,” said Naoki Fujiwara, Tokyo-based chief fund manager at Shinkin Asset Management Co., which oversees about 600 billion yen. “Individuals and hedge funds are wanting to take money off the table. Emerging-market currencies are still facing problems that started with the Fed’s tapering and falling into a negative cycle. The positivity we saw at the start of the year is being corrected.”