Nikkei Slips as Goldman Slashes Japan's Growth Forecast
Japan's market took yet another beating today when Goldman Sachs lowered its growth forecast for the country's annual gross domestic product. Goldman had previously estimated growth of 1.3%, but has dropped that number down to 0.7% in light of the recent disasters and a slowdown across the country as power cuts and rolling black outs hamper business of all kinds.
Meanwhile, the firm is playing down the radiation danger to its own employees. Goldman has reportedly required its Tokyo-based employees to stay put calling a meeting at its Tokyo headquarters. "The message was clear: no one is to leave," a source told CNBC. "If you do leave, you can't come back and expect to still work for Goldman."
Other nuclear-related shares closed lower with Japan Steel Work plunging 1.3%, Fuji Electric, which built Japan's first commercial nuclear power station in 1965, slipping 1.2% and Hitachi down 1%.
Japanese banks slid lower with Mitsubishi UFJ plunging 2.8%, Mizuho Financial losing 2.1% and Sumitomo Mitsui Financial Group falling 1%. Insurance companies also took a hit with Dai-Ichi Life sliding 5.2%.
Some saw the recent slump as a buying opportunity and snapped up shares in firms like Alps Electric, which makes electronics for cars and spiked 6.6%, and in Meidensha, an electrical company supplying machinery to utility and construction businesses, including generators and water-treatment systems. Meidensha shares climbed 7.6%.
In Hong Kong, banking stocks closed lower with Agricultural Bank of China falling 1.9% and Bank of China retreating 0.5%. Chongqing Rural Commercial Bank was the worst performer in the sector, plunging 12.5% after disappointing analysts with a lower-than-expected growth forecast for 2011.
Meanwhile, firms that beat estimates reaped handsome rewards. Brilliance China, making cars under the BMW brand name, rallied 5.3%, and retailer Gome Electrical Appliances, whose founder is serving a 14-year prison sentence for insider trading, shot up 2.8%.
New fears that Beijing may raise interest rates as soon as next month dampened the recent stock buying spree. Shares in car companies closed lower with Beiqi Foton Motor leading the way with a 4.3% drop and FAW Car losing 2.9%. Chongqing Changan Automobile posted a 1.6% loss.
Among electronic appliance makers Qingdao Haier plunged 4.3%, Gree Appliances tumbled 3.6%, and Suning Appliance fell 1.7%.