Toyota's woes continued today as the company announced the recall of around 1.7 million vehicles. Toyota says the recall is voluntary, warning that some Lexus models could have a loose fuel pressure sensor, eventually leading to a leak, and others could have faulty fuel pipes. While company documents make the problems sound quite easy to fix, shares tumbled today.
Prices on the London Metal Exchange sank 2.5% and crude oil also closed lower yesterday. This steep fall in the value of commodities sent shares in Japanese trading houses spiraling with Mitsui & Co. diving 1.9% and Mitsubishi Corp. losing 1.5%. Sumitomo Metal Mining tumbled 2.4% and oil and gas company Inpex slipped 1.3%.
Other big losers in Japan included Mitsubishi Tanabe Pharma Corp, which nosedived 5.5% after a newspaper reported it was selling drugs that hadn't been properly tested, and Eisai Co., which lost face after a drug it had been hyping for the treatment of sepsis failed its efficacy tests. Investors had been banking on the drug, Eritoran, to bring in sales worth more than $1 billion, according to InPharm.com, but today Eisai slumped 5% on dashed hopes.
New Year's Travel Plans Boost Transportation Stocks
In China transportation stocks surged, helped along by the masses of people expected to travel over the upcoming holiday season. Airline's shot up with China Southern Airlines shooting up 3.6%, Air China jumping 3.4% and China Eastern Airlines advancing 2.4%. Hainan Airlines, toting both passengers and freight to China's island destination as well as to other locations, rocketed up 6.2%. The airline is receiving rave reviews from customers with travelers posting comments like, "Best flight ever. . . . The other Chinese airlines can learn a thing from Hainan Airlines."
Trainmakers continued their climb thanks to contracts to extend China's rail lines and brand new deals to export their technology and hardware. China CNR shot up 5.1% and CSR leaped 3.6%.
In Hong Kong it wasn't such good news for major airline Cathay Pacific, which slumped 2.8%. Shipping companies, which made major gains in China, slid lower in Hong Kong. Cosco Pacific dropped 2.2%, China Shipping Container Lines sank 1.3% and China Cosco Holdings dipped 0.6%. China Shipping Development managed a 0.7% rise.
Other gainers in Hong Kong included Chinese Internet companies with service provider China Unicom racking up a 2.3% gain and Tencent climbing 1.9%. According to gamesindustry.biz, Tencent's booming business is launching a $760 million development fund and is partnering up with a Japanese social network company.