Nintendo, Sony Stocks Move Lower: Can The US-Iran Conflict Hurt Electronic Shipments?

Nintendo stock declined nearly 3% while Sony shares fell over 1%.

• The escalating war between the U.S. and Iran has led to oil tankers skipping the Strait of Hormuz and the closure of some of the busiest airports in the Middle East.
• Nintendo and Sony are among some of the biggest electronics producers from Japan, with their products sold globally.
• Stocktwits sentiment for Nintendo was ‘neutral’ as of early Monday.

Shares of electronics giants Nintendo and Sony Group declined in Japan on Monday, signaling a rise in investor concerns that the U.S.-Iran conflict, which is leading to the likely closure of the Strait Hormuz, would clog up logistics routes and hurt shipments to Europe and North America.

Nintendo shares declined 2.8%, and Sony shares declined 1.4% on the Tokyo Stock Exchange. 

Impact Of The US-Iran Conflict

Over the weekend, the U.S. struck targets in Iran and killed its Supreme Leader, Ayatollah Ali Khamenei. Bombardments from both sides have struck neighbouring countries Kuwait, Bahrain, Qatar, and the United Arab Emirates, even as U.S. President Donald Trump has vowed to keep up the offensive if his demands are not met.

Several tanker owners have suspended crude oil and natural gas shipments via the Strait of Hormuz, Reuters reported. Meanwhile, thousands of flights were cancelled as war kept major Middle Eastern airports, including Dubai, the world's busiest international hub, as well as key transit airports, including Abu Dhabi in the UAE and Doha in Qatar, severely restricted.

U.S. futures dipped about 1% early Monday, and Asian stocks fell sharply. Hong Kong’s Hang Seng fell to its lowest level in the new year.

On Stocktwits, retail sentiment was ‘neutral’ for Nintendo’s U.S.-listed shares and Sony’s U.S. stock.

Switch 2 Sales At Risk

For Nintendo, the latest conflict risks disrupting the supply for its Switch 2 gaming unit. The console, launched last June, broke records and pushed the company’s shares to a record high last year.

This comes on the heels of Reuters reporting on Friday that shareholders MUFG Bank and the Bank of Kyoto were selling about $1.9 billion Nintendo stock back to the company. 

The move is rising from regulators and the Tokyo Stock Exchange asking companies based in Japan to unwind cross-shareholdings, and the banks have outlined policies to reduce their stakes.

U.S.-listed shares of Nintendo are down 16.4% and Sony stock has fallen 10.7% year to date.

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