Asia Market Report-Nikkei falls as PM resigns

Date: Wednesday 02 Jun 2010

The Nikkei fell on Wednesday as investors digested news of Prime Minister Yukio Hatoyama’s resignation.

Japanese shares initially rose on the back of the news, but after the morning session, stocks moved into the red.

Hatoyama’s resignation comes after only eight months in power and two months before elections. Today’s news further rattled investor confidence about economic growth in Japan. Confidence has already been hit by Europe's debt crisis and figures out yesterday showing slower than expected growth in China's manufacturing.

Losses were seen across the board. Canon fell 0.27% while Sony lost 2.91% in Tokyo. Honda declined 1.9%.

Commodities took a hit as crude oil prices fell nearly 2%. Shares in Inpex fell 1.2%. Shares in trading house Mitsui & Co tumbled 8% on concern about its exposure to the Gulf of Mexico oil spill.

Financials also moved out of favour. Mizuho Financial fell 0.61% and Mitsubishi Tokyo fell 1.35%.

The benchmark Nikkei 225 index fell 108 points to settle at 9,603.

The Hang Seng fell as Chinese lenders came under heavy pressure as Bank of China announced a convertible bonds sale. ICBC lost 0.7% while China Construction Bank declined 1.1% in Hong Kong.

Commodities were also under pressure. Shares in Jiangxi Copper fell 1.5% on the back of weaker metal prices. Aluminum Corp of China skidded 3.3%.

The Hang Seng index advanced 22 points to 19,519.