Reuters: Global Markets: Fast Retailing slumps 11 percent, helping drag Nikkei down sharply

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Fast Retailing slumps 11 percent, helping drag Nikkei down sharply May 30th 2013, 10:20 Tweet Share this Email Print Related News Nikkei edges up in choppy trade, investors still uneasy after recent battering Tue, May 28 2013 Nikkei hits new 5-1/2-year high but pace of gains slow, Bernanke cues eyed Tue, May 21 2013 Nikkei hits new 5 1/2-year high on weak yen, signs of improving economy Mon, May 20 2013 Nikkei climbs to new 5-1/2-year high, ends above 15,000; Sony soars Wed, May 15 2013 Analysis & Opinion Australia helps retail investors buy government bonds Related Topics Hot Stocks » Asian Markets » The logo of Fast Retailing's Uniqlo is seen in Tokyo April 10, 2013. Credit: Reuters/Yuya Shino TOKYO | Thu May 30, 2013 6:20am EDT TOKYO (Reuters) - Shares of Fast Retailing (9983.T) tumbled 11 percent on Thursday, its biggest one-day drop since March 2011, with dealers saying some investors may be using the stock to help push down Tokyo's Nikkei .N225. Fast Retailing, owner of casual fashion chain Uniqlo, has the highest weighting in the benchmark index at 9.8 percent. Its drop on Thursday took almost 162 points off the Nikkei, which plunged 737.43 points, or 5.2 percent, to 13,589.03, its lowest since April 23. "Hedge fund traders who want to drag down Nikkei futures would sell Fast Retailing as it has a big contribution to the index," said a dealer at a Japanese securities firm. "It's algorithm trade. As soon as the market receives a signal that the stock is falling, other traders likely follow suit. That's how speculators pull down the market, and Fast Retailing is one of the stocks used as a tool in such trade." Trading volume on Fast Retailing was 77 percent above its full daily average for the past 90 trading days. Despite the plunge, it is still up 52 percent this year, outpacing the Nikkei's 31 percent rise. Wireless operator SoftBank Corp (9984.T), down 4.3 percent, was the second top-weighted loser on Thursday, followed by rival KDDI Corp (9433.T) and industrial robot maker Fanuc Corp (6954.T). SoftBank carries a 4.5 percent weighting in the Nikkei based on Thursday's close, while Fanuc has 4.3 percent and KDDI has 2.6 percent. The dealer added investors would buy Fast Retailing when they try to push the Nikkei higher. The plunge in the benchmark Nikkei accelerated in the afternoon, extending its losses to nearly 15 percent since it hit a 5-1/2-year high on May 23, putting it well into "overbought" territory and leaving it ripe for profit-taking. It ended 7.3 percent lower the same day. (Reporting by Ayai Tomisawa and Sophie Knight; Writing by Dominic Lau; Editing by Kim Coghill) Tweet this Link this Share this Digg this Email Reprints Comments (0) This discussion is now closed. We welcome comments on our articles for a limited period after their publication.

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