Japanese automakers fell across the board on the Tokyo Stock Exchange Monday, after Citigroup slashed its rating on the country’s auto sector.
Citing lingering production uncertainty after the March 11th earthquake, Citi downgraded the shares of Japan’s Big Three carmakers to a ”
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Shares of Toyota, Honda and Nissan closed over two percent lower, with the auto sector accounting for more than a fifth of the Nikkei 225’s fall.
Japan’s automakers resumed production at all their domestic factories in stages starting Monday, but output levels were at half of original plans.
Much still also depends on the availability of parts and power.
Japan’s government spokesman Yukio Edano added to the bearish sentiment, hinting at the possibility of expanding the current 20km radius evacuation zone around the crippled Fukushima nuclear power plant.
Edano said, “As for the 20-30km zone, there might not be a need for people to be indoors the whole time, but we need to be prepared if there is a lot of radiation emitted and the situation worsens.”
But shares of nuclear plant operator Tokyo Electric Power Co rallied again Monday, after brokerage Mizuho Securities repeated its “Outperform” rating on the battered power company’s stock last week.
Bottom line: Japan’s top carmakers resume production at all domestic factories in stages from Monday. But auto shares fall after Citi slashes rating on the sector.