TOKYO: Japan’s stocks fell as a rout in oil and commodity prices dragged energy and material shares lower, outweighing a report showing the nation’s economy avoided a recession.
The Topix index dropped 1 percent at the close in Tokyo, with miners and oil and coal producers leading declines. The Nikkei 225 Stock Average also lost 1 percent. Energy explorer Inpex Corp. sank 5 percent, the most since January, as crude held near a six-year low below $38 a barrel. Japan’s economy expanded an annualized 1 percent in the third quarter, according to figures published on Tuesday, after an earlier reading had shown a second straight quarterly contraction.
Slumping resource prices “are beginning to show up in the credit risk of major, global commodity companies, and even countries,” said Norihiro Fujito, general manager of Mitsubishi UFJ Morgan Stanley Securities Co. in Tokyo. “As more people become aware of the implications, that could lead to a sudden risk-off period. And today we’re seeing some positioning to prepare for such a scenario.”
E-mini futures on the Standard & Poor’s 500 Index slipped 0.4 percent after the underlying measure lost 0.7 percent on Monday, with U.S. Steel Corp. sinking 8.8 percent after Fitch cut its credit rating on the steel producer. Copper producer Freeport-McMoran Inc. tumbled 7.9 percent to a 13-year low as its one-year default risk surged to the highest since 2008, according to Bloomberg data.
