Most Japanese Stocks Fall on Europe Concern, Analyst Ratings

Dec. 1 () -- Most Japanese stocks fell after analysts cut investment recommendations and the euro depreciated to an 11-week low against the yen, damping the outlook for export earnings.

Panasonic Corp., an electronics maker that gets about 10 percent of its sales in Europe, dropped 0.8 percent as the euro weakened after Standard & Poor’s said it may cut Portugal’s credit ratings. Advantest Corp., the world’s biggest maker of chip-testing equipment, lost 0.8 percent. Asahi Glass Co. and Nippon Electric Glass Co. both slumped at least 3 percent after Goldman Sachs Group Inc. cut its ratings on the companies.

“The market is wary of the size of budget deficits in European nations, and that’s not the kind of issue that could be resolved in a few days,” said Hiroichi Nishi, an equities manager in Tokyo at Nikko Cordial Securities Inc.

More than four stocks declined for every three that rose in the broad Topix index, which was little changed at 861.31 as of 9:30 a.m. in Tokyo. The Nikkei 225 Stock Average gained 0.2 percent to 9,958.68.

The Topix decreased 5.1 percent this year through yesterday, compared with gains of 5.9 percent by the Standard & Poor’s 500 Index and 3.1 percent by the Stoxx Europe 600 Index. Stocks in the Japanese benchmark are valued at 14.9 times estimated earnings on average, compared with 13.9 times for the S&P 500 and 11.6 times for the Stoxx 600.

Panasonic, Europe

Panasonic decreased 0.8 percent to 1,195 yen. Advantest dropped 0.8 percent to 1,708 yen. Hoya Corp., which is Japan’s biggest maker of eyeglass lenses and gets 60 percent of its revenue abroad, slumped 2.1 percent to 1,933 yen. Olympus Corp., an optical-instrument maker that derives more than 20 percent of its sales from Europe, retreated 1.6 percent to 2,317 yen.

Standard & Poor’s Ratings Services said about 5:40 a.m. Tokyo time today that it may cut Portugal’s credit ratings on concern that the government has made little progress at boosting economic growth to offset the fiscal drag from scheduled 2011 budget cuts.

Officials meeting last weekend in Brussels agreed to an 85 billion-euro bailout ($110 billion) for Ireland, which followed Greece in getting assistance this year.

The euro weakened to 108.35 against the yen last night in Tokyo, the lowest level since Sept. 15. The dollar depreciated to 83.43 against Japan’s currency, a four-day low. Weaker foreign-exchange rates reduce the value of overseas income for Japanese companies when converted into their home currency.

Glassmakers Lead Declines

Glassmakers declined the most among the Topix’s 33 industry groups. Asahi Glass, Japan’s largest glass producer, tumbled 3.1 percent to 904 yen, the biggest drop in the Nikkei, after Goldman Sachs reduced its rating to “sell” from “neutral.” Nippon Electric Glass, which was cut to “neutral” from “buy,” sank 3 percent to 1,140 yen. Nippon Sheet Glass Co. retreated 1.5 percent to 193 yen.

Acom Co., a consumer lender, plunged 3.8 percent to 942 yen, the largest drop since Nov. 1. The company was removed from the MSCI Japan Index yesterday.

Among stocks that rose, Hitachi Cable Ltd., which makes power cables and optical fiber, jumped 3.2 percent to 228 yen, on course for the highest close since Aug. 9. Goldman Sachs raised the shares to “buy” from “neutral.”

--Editors: Nicolas Johnson, Sam Waite.