Most Japanese Stocks Fall, Led by Trading Houses on Metals; Nomura Drops

Most Japanese stocks fell, led by trading companies, after metal prices dropped and on concern recent gains have outpaced earnings prospects.

Mitsubishi Corp., Japan’s largest commodity trader, lost 1 percent after metal prices dropped yesterday. Nomura Holdings Inc., Japan’s biggest brokerage, slid 0.2 percent. Suzuki Motor Corp., a maker of automobiles and motorcycles, climbed 1.5 percent after Credit Suisse Group initiated coverage of the company at “outperform.”

The Nikkei 225 Stock Average dropped 0.1 percent 10,298.94 as of 9:52 a.m. in Tokyo. The broader Topix index declined 0.1 percent to 901.78 with more than eight stocks falling for every five that rose. The Topix has jumped 12 percent from its 2010 low on Nov. 3.

“The market seems to be overheated in the short-term,” said Mitsushige Akino, who oversees about $450 million in assets in Tokyo at Ichiyoshi Investment Management Co.

The 25-day Toraku index, a measure of daily stock winners and losers on the Topix, was 153 yesterday. A level of more than 120 suggests to some investors the market is poised to fall. The index has remained above 120 since Dec. 2.

For the year, the Topix declined 0.6 percent through yesterday, compared with gains of 11 percent by the S&P 500 and 8.9 percent by the Stoxx Europe 600 Index. Stocks in the Japanese benchmark are valued at 15.6 times estimated earnings on average, higher than the 14.5 times for the S&P 500 and 12.3 times for the Stoxx 600.

Metal Prices Drop

Trading companies were the heaviest drag on the market. Mitsubishi lost 1 percent to 2,220 yen. Mitsui & Co., which counts commodities as its largest source of profit, sank 1 percent to 1,344 yen. Sumitomo Corp. retreated 0.8 percent to 1,183 yen.

The London Metal Exchange Index of prices for six industrial metals including copper and aluminum retreated 0.9 percent yesterday.

Brokerages had the largest drop among the 33 industry groups in the Topix. Nomura slid 0.2 percent to 525 yen. Daiwa Securities Group Inc., Japan’s second-biggest securities company, fell 0.7 percent to 418 yen. Mizuho Securities Co. retreated 1.3 percent to 226 yen.

Among stocks that rose, Suzuki Motor advanced 1.5 percent to 2,062 yen after the company was rated “outperform” in new coverage at Credit Suisse.