TOKYO, Nov 10 (Businesshala) – Shares of Japan’s Nikkei average sank on Wednesday as the companies’ latest earnings underscored a fall from rising raw material costs, though analysts said the overall earnings picture was not bleak.
The Nikkei average was down 0.30% at 29,197.00, on course for a fourth straight day of losses, while the broader Topix slipped 0.21% to 2,014.52.
Sumitomo Rubber fell 12.7% after the firm downgraded its profit outlook, becoming the latest victim from rising raw material costs.
Mitsubishi Materials declined 6.2% after the non-ferrous metals firm revised its operating profit outlook.
Elecom fell 11.1% after the maker of USB memory and other computer-related accessories cut its profit forecast due to chip shortages and rising costs.
Beverage maker Kirin Holdings fell 5.8% as the market was overwhelmed by its quarterly results, which were hit by domestic social restrictions.
Nissan Motor, on the other hand, jumped 7% when the carmaker raised its full-year operating profit outlook by a fifth, as its margins were boosted by new models and lower sales incentives due to tighter supplies of vehicles.
Games company Nexon was up 14.0% after the firm raised its earnings outlook, while Kansai Paint rose 5.2% on sharper earnings.
Some analysts say that the earnings of the Japanese companies have been very good so far and this could soon benefit the market.
Quarterly earnings beat estimates by 5.1% so far, said analysts at Okasan Securities, who have announced results as of Tuesday.
Data from Refinitiv Datastream shows Topix traded at 14.4 times expected earnings, below its average over the past 10 years, in contrast to US stocks, which traded at historic highs with a multiplier of 21.1. Huh.
Takashi Hiroki, chief strategist at Monex Securities, said: “The corporate earnings outlook is improving, so I believe the Japanese market will rebound soon.” (Reporting by Hideyuki Sano; Editing by Sherry Jacob-Phillips)