Tokyo stocks open lower on oil price retreat

Tokyo, Feb 2 (IANS) Tokyo stocks retreated from the off in Tokyo as investor sentiment was dampened by a drop in oil prices and the yen’s rise against the US dollar.

As of 9.15 a.m., the 225-issue Nikkei Stock Average lost 116.92 points, or 0.65 percent, from Monday to 17,748.31, Xinhua news agency reported.

The broader Topix index of all First Section issues on the Tokyo Stock Exchange, meanwhile, dropped 12.73 points, or 0.87 percent, at 1,449.94.

Notable decliners at the start of trading comprised mining, iron and steel, and oil and coal product-related shares.

US stocks end mixed amid downbeat data

The US stocks pared early losses to end mixed on Monday, as investors assessed a batch of generally negative economic reports.

The Dow Jones Industrial Average fell 17.12 points, or 0.10 percent, to 16,449.18. The S&P 500 edged down 0.86 point, or 0.04 percent, to 1,939.38. The Nasdaq Composite Index rose 6.41 points, or 0.14 percent, to 4,620.37, reports Xinhua.

The US personal income increased $42.5 billion, or 0.3 percent, and disposable personal income increased $37.8 billion, or 0.3 percent, in December, the Commerce Department said on Monday.

“Consumers have been defensive, growing savings faster than spending, since May. This is unusual behaviour, especially since gasoline prices are falling,” said Chris Low, chief economist at FTN Financial, in a note.

In a separate report, the department announced that the US construction spending during December 2015 was estimated at a seasonally-adjusted annual rate of $1,116.6 billion, 0.1 percent above the revised November reading but missing market consensus of a 0.6-percent gain.

Meanwhile, the US January purchasing managers’ index (PMI) registered 48.2 percent, an increase of 0.2 percentage point from the seasonally-adjusted December reading, the Institute for Supply Management (ISM) said on Monday.

A reading above 50 indicates the sector is generally expanding, while a reading below that level indicates contraction.

The weaker-than-expected economic data raised expectations that the US Federal Reserve would go slow on future interest rate hikes.

Overseas, Chinese shares began the month on a weak note on Monday, with the benchmark Shanghai Composite slipping 1.78 percent, as the country’s January PMI fell to its lowest level since August 2012.

Tokyo shares surged on Monday on the Bank of Japan’s decision to further its monetary easing policy, with the 225-issue Nikkei Stock Average jumping 1.98 percent.

European equities ended lower on Monday. British benchmark FTSE 100 Index fell 0.39 percent, while French benchmark index CAC 40 declined 0.41 percent.

Chinese yuan strengthens against dollar

The central parity rate of the Chinese currency renminbi, or the yuan, strengthened by 29 basis points to 6.551 against the US dollar on Tuesday, according to the China Foreign Exchange Trading System.

In China’s spot foreign exchange market, the yuan is allowed to rise or fall by two percent from the central parity rate each trading day, reports Xinhua.

The central parity rate of the yuan against the US dollar is based on a weighted average of prices offered by market makers before the opening of the interbank market each business day.

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