Tokyo stocks down as telecoms plummet on fee cut plans

Tokyo stocks down as telecoms plummet on fee cut plans
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Tokyo: Tokyo stocks closed lower on Thursday, with major telecom firms plunging after one company announced it would slash fees, while fresh concerns emerged over the prospects for the Chinese economy.

The benchmark Nikkei 225 index fell 1.06 percent, or 232.81 points, to end at 21,687.65, while the broader Topix index lost 0.85 percent, or 14.07 points, to 1,632.05.

Telecoms nosedived after the industry leader NTT Docomo said it would cut fees under government pressure, with its shares plunging 14.71 percent to 2,426 yen.

Its rival KDDI plummeted 16.14 percent to 2,360 yen on the news, and SoftBank dropped 8.15 percent to 8,310 yen.

The Nikkei business daily meanwhile reported KDDI would tie up with internet titan Rakuten on payment, logistics and roaming services.

Rakuten, which confirmed the report later, rose 3.01 percent to 787 yen. The company has said it will launch its mobile service later next year.

The dollar fetched 112.89 yen in early Asian trade, almost unchanged from New York, but lower than 113.22 yen in Tokyo late Wednesday.

Chinese factory activity slowed in October, official data showed Wednesday, adding to a growing list of bad news for the Asian giant as it struggles to maintain economic momentum in the face of US tariffs and a weakening yuan.

The Purchasing Managers’ Index (PMI), a key gauge of factory conditions, came in at 50.2 for the month, down from 50.8 in September, the National Bureau of Statistics said.

The official PMIs “were the latest downbeat indicators,” Mark Williams of Capital Economics said in a note to clients.

“The Markit manufacturing PMI due on Thursday is the next indicator to watch,” he said.

The fall in Japanese shares is in part a rebalancing, in “reaction to a rise of more than 460 yen in the Nikkei index yesterday,” Toshiyuki Kanayama, senior market analyst at Monex said in a commentary.

In Tokyo shares, Panasonic fell 5.64 percent to 1,179 yen after it reported on Wednesday its first-half to September net profit fell 4.5 percent on-year to 113.6 billion yen ($1 billion).

Some carmakers were lower, with Toyota down 0.58 percent at 6,576 yen after it said it would recall more than 1.6 million cars due to airbag problems.

Nissan was down 0.29 percent at 1,024.5 yen.