Tokyo stocks open lower, Toshiba down on share issuance

TOKYO: Tokyo stocks opened lower Monday morning following declines on Wall Street, with Toshiba plunging after the embattled Japanese conglomerate announced plans to issue new shares.

The benchmark Nikkei 225 index fell 0.45 percent, or 100.80 points, to 22,296.00 in early trade, while the broader Topix was down 0.40 percent, or 6.99 points, at 1,756.77.

"Since the Nikkei index has overheated in the short term, its speed adjustment is expected to continue for now," Masayuki Kubota, chief strategist at Rakuten Securities, said in a commentary.

"But corporate earnings are expanding rapidly, chances of further selling are expected to be slim," Kubota said.

Wall Street stocks pulled back Friday amid skepticism over the prospects for a US tax cut, as Apple dipped after delaying the release of its anticipated HomePod speaker program.

The Dow Jones Industrial Average dropped 0.4 percent, while the broad-based S&P 500 lost 0.3 percent.

In Tokyo, Toshiba dropped 3.42 percent to 282 yen after unveiling plans to issue new shares to raise a total of 600 billion yen ($5.3 billion), with financing expected to close on December 5.

Toshiba is on the ropes after the disastrous acquisition of US nuclear energy firm Westinghouse, which racked up billions of dollars in losses before being placed under bankruptcy protection.

Nissan rose 0.23 percent to 1,072.5 yen after it submitted the results of a probe into an inspection scandal to the transport ministry.

The dollar traded at 112.05 yen Monday morning, compared with 112.14 yen in New York late Friday.