Japanese Stocks Fluctuate After Earnings, U.S. Housing Report

Oct. 21 (Bloomberg) -- Japanese stocks fluctuated as lower- than-estimated U.S. housing starts and a slump in raw-materials prices offset an improving outlook for technology companies.

Sumitomo Metal Mining Co., Japan’s biggest nickel and gold producer, lost 1.3 percent after metal prices dropped. Nissan Motor Co., Japan’s third-largest automaker, fell 0.7 percent. Nitto Denko Corp., the world’s largest maker of optical film for liquid-crystal displays, rose 3.7 percent after first-half earnings beat estimates.

The Nikkei 225 Stock Average dropped 0.2 percent to 10,313.47 as of 10:04 a.m. in Tokyo. The broader Topix index declined 0.3 percent to 912.21, with more than two stocks retreating for each that advanced. Both gauges closed yesterday at their highest this month.

“Stocks are set for a slight dip at the start of trading as U.S. investors were put off by the housing numbers and are starting to become cautious after the recent rally,” said Hiroichi Nishi, an equities manager at Nikko Cordial Securities Inc. in Tokyo. “The market will be focused on companies that are lifting their earnings outlooks.”

Toshiba Corp., the world’s second-biggest maker of flash memory chips, added 2.3 percent after CLSA Ltd. boosted its investment rating on the shares and SanDisk Corp. posted better- than-expected results.

In New York, the Standard & Poor’s 500 Index retreated from the highest in a year yesterday, losing 0.6 percent. Housing starts rose 0.5 percent to an annual rate of 590,000 in September, a Commerce Department report showed, missing economists’ estimates.

Commodities Fall

The Topix index has climbed 30 percent from a 25-year low on March 12 as global measures to increase money supply revived growth. Stocks in the gauge are valued at 5.7 times cash flow, compared with an average of 14 times during the past five years.

Sumitomo Metal Mining retreated 1.3 percent to 1,566 yen. Mitsubishi Corp., Japan’s largest trading company, declined 0.7 percent to 2,025 yen.

Crude oil for December delivery dropped for the first time in nine days yesterday, losing 0.5 percent to $79.09 a barrel in New York. The London Metals Index, a measure of six metals including copper and zinc, fell 1 percent yesterday, retreating from a two-month high.

Nissan lost 0.7 percent to 668 yen. Mitsubishi Estate Co., Japan’s biggest property developer by market value, slumped 2.2 percent to 1,466 yen.

Nitto Denko, Toshiba

Nitto Denko added 3.7 percent to 2,790 yen. The company said in a preliminary earnings statement yesterday that operating profit for the six months to Sept. 30 totaled 25.5 billion yen, as sales recovered and exceeded analysts’ estimates. Profit also beat estimates.

Toshiba climbed 2.3 percent to 537 yen. The shares were raised to “buy” from “underperform” at CLSA Ltd. on the view that rising use of so-called smart phones will boost demand for the company’s chips.

SanDisk, the biggest maker of flash-memory cards used in digital cameras and mobile phones, said fourth-quarter sales will probably be between $1.1 billion and $1.2 billion, compared with analysts’ estimates for 835.4 million. The shares surged 9.5 percent in late trading in New York.

Sanyo Electric Co. gained 1.9 percent to 212 yen. The world’s largest maker of rechargeable batteries will supply Toyota Motor Corp. with batteries for hybrid cars, the Asahi newspaper reported.