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With Record Loss Warning, Nissan Shares Fall 10% due to Coronavirus

With Record Loss Warning, Nissan Shares Fall 10% due to Coronavirus

Nissan's offers plunged by 10% in Tokyo, after it had warned that it would see a yearly record loss.

Nissan's offers plunged by 10% in Tokyo, after it had warned that it would see a yearly record loss.


Japan's second-biggest car manufacturer stated that it expects a $4.5bn (£3.5bn) operating loss this year as coronavirus hinders its turnaround endeavors. 


The more terrible than expected forecast came as the company anticipated its sales will be the lowest in 10 years.


It's the most recent sign of the degree of the damage brought about by the pandemic to the worldwide car industry.


Makoto Uchida, Nissan's chief executive, told investors: “The market outlook remains uncertain and we may see a further deterioration in demand due to a possible second wave of the pandemic.”


Mr. Uchida also said that the company would not make a payout on their dividend to shareholders this year. 


Nissan's worldwide sales dropped 48% in the April-June period as they split in North America and fell by 40% in China. 


Even before the coronavirus pandemic, the company was grappling with various issues.


Last May, Nissan declared a significant turnaround plan after announcing its greatest loss in two decades for the past financial year. 


Under the four-year plan, production will be cut by 20%, and Nissan's plant in Barcelona, Spain will be shut down. 


The UK factory company plant in Sunderland was saved. However, Nissan's worldwide chief operating head told BBC News that the operation would be "unsustainable" if the UK leaves the European Union without a trade deal.


In May, Nissan's alliance partner  Renault declared that it would lay off 15,000 employees worldwide as the major aspect of a €2bn (£1.8bn) cost-cutting plan, after its sales had plunged due to the pandemic. 


"This plan is essential," said interim boss Clotilde Delbos, who reported the company placed a greater emphasis on electric cars and vans. 


About 4,600 employees will be dismissed  in France, and Renault has said six plants are under review for potential cuts and closure.


Economic Calendar Highlights


  • USD: Pending Home Sales (MoM) (Jun): 3:00pm UK Time

The National Association of Realtors (NAR) Pending Home Sales Report measures the change in the number of homes under contract to be sold but still awaiting the closing transaction, excluding new construction. 

A higher than expected reading should be taken as positive/bullish for the USD, while a lower than expected reading should be taken as negative/bearish for the USD.

  • USD: Crude Oil Inventories 3:30pm UK Time

The Energy Information Administration's (EIA) Crude Oil Inventories quantifies the week after week change in the quantity of barrels of business raw petroleum held by US firms. The degree of inventories impacts the cost of oil based goods, which can affect expansion.

On the off chance that the increase of crude inventories is more than anticipated, it infers more vulnerable interest and is bearish at unrefined costs. The equivalent can be said if a decrease in inventories is not exactly anticipated. 

In the event that the crude increase is not exactly expected, it infers more prominent interest and is bullish at unrefined costs. The equivalent can be said if a decrease in inventories is more than anticipated.

  • USD: Fed Interest Rate Decision: 7:00pm UK Time

Federal Open Market Committee (FOMC) members vote on where to set the rate. Traders watch interest rate changes closely as short term interest rates are the primary factor in currency valuation. 

A higher than expected rate is positive/bullish for the USD, while a lower than expected rate is negative/bearish for the USD.