Nikkei left dizzy after double blow

JAPAN'S stocks took a one-two punch today from poor macro-economic indicators on both sides of the Pacific.

Looming corporate results also kept buyers away, with the focus holding on Matsushita Electric Industrial, while chipmaker Fujitsu dipped further after a poor forecast.

On the big-picture level, the Conference Board first said that US consumer confidence dropped this month, dealing a blow to Wall Street overnight. Then Japanese authorities piled in, saying industrial production dropped in June. Bruised by the dual impact, the Nikkei 225 fell 201.65 points, or 2.05%, to 9632.66.

Among individual stocks, chip and computer maker Fujitsu suffered a continued pullback after indicating earlier in the week that its first-half loss would exceed expectations. It fell 13 yen, or 2.4%, to 534 yen today, extending the 3.6% decline that came yesterday.

The company said net losses would surpass an earlier call of 40bn yen (£205m) to 50bn yen. Analysts are now wondering whether the negative amendment will also torpedo the company's resolve to return to the black in the full year to March.

Matsushita, which posted a handy rise yesterday, reversed course as the clock ticked down towards the release of its first-quarter numbers due later today. Operating profit was seen gaining by more than 60% to 24bn yen.

Results were also awaited from Toshiba, seven yen, or 1.4%, lighter at 495 yen, and Ricoh, which was better by 10 yen, or 0.5%, at 2095 yen.

Honda Motor, which raised its full-year forecast yesterday, nevertheless saw its shares ease 20 yen, or 0.4%, to 4690 yen.

The weakness was shared by its rivals, with Toyota Motor falling 10 yen, or 0.3%, to 3060 yen, and Nissan Motor off 10 yen, or 0.9%, to 1165 yen.

Nisshin Steel put in one of the most robust showings, up seven yen, or 5%, to 145 yen. As has been the case with many of its peers in recent weeks, investors were heartened by prospects for growth in the booming China market.

Hong Kong stocks traded sideways, with the Hang Seng easing 2.34 points, or 0.02%, to 10,196.26.

After the weak US confidence data, exporters felt the pinch. Garment trader Li & Fung dipped 30 cents, or 2.7%, to HK$10.90. Micro-motor maker Johnson Electric softened 10 cents, or 1%, to HK$10.60.

China oil producer Cnooc was hardest hit. It fell 45 cents, or 3.25%, to HK$13.40, a victim of profit-taking after it raced higher yesterday as management hinted at the payment of a special dividend. In Singapore chip-tester ST Assembly Test Services stood out after paring quarterly losses, raising hopes of an upturn. The State-linked firm gained eight cents, or 3.9%, to S$2.12.

The wider market was a shade higher, despite a dip in major lender DBS Group, which retreated 10 cents, or 0.1%, to S$11.70. The Straits Times index added 4.91 points to 1585.79, up 0.31%.

Philippines shares finally found a floor after an attempted military revolt spooked investors and triggered two consecutive sessions of declines. The Philippines Composite was level, off only 0.05 point at 1225.18, a move that barely registered in percentage terms.