Tokyo Shares End Lower On Pre-US Earnings Selling
-Tokyo stocks fell Tuesday as trepidation before imminent U.S. earnings and a resurgent yen triggered selling across a broad range of sectors, while some shares also moved sharply on earnings-related media reports.
The Nikkei 225 Stock Average fell 90.67 points, or 0.8%, to 11,161.23. The Topix index of all the Tokyo Stock Exchange First Section issues fell 6.34 points, or 0.6%, to 988.44, with 28 of 33 subindexes ending in negative territory.
Trading volume continued to look relatively robust in totaling well over 2.3 billion shares.
The market was lower from the opening bell, as investors engaged in protective selling ahead of imminent U.S. earnings reports, while also taking profits in recent gainers.
"Investors are in wait-and-see mode ahead of U.S. earnings, and Intel's in particular," said Hiroichi Nishi, general manager at Nikko Cordial Securities, adding that the Nikkei remains technically overheated.
Selling accelerated briefly in the afternoon session as the yen rose against its major rivals. As of 0600 GMT the dollar traded at Y92.77, while the euro was at Y126.10.
Broad market selling took a toll on heavyweight Fast Retailing, which closed down 1.7% at Y14,970. Among hard-hit shippers, Mitsui OSK lost 2.6% to Y667 after a brokerage downgrade.
Steelmakers were the worst performers by sector, despite a Nikkei report on Tokyo Steel that it will boost steel production to 180,000 tons this month, a 20% hike from March, thanks to a rebound in Asian steel demand.
"This isn't bad news, but it has already been priced into steel shares; their April-June period is likely to be strong," said an analyst at a Japanese asset management company. He added that investors are now shifting attention to July-September quarterly earnings, which could be squeezed by rising coking coal prices.
Tokyo Steel lost 2.8% to Y1,191, while bellwethers Nippon Steel and JFE Holdings dropped 2.4% to Y359, and 2.9% to Y3,675, respectively.
General contractor Kajima lost 3.0% to Y230 on heavy volume, following a Nikkei report that the firm now expects an operating loss of over Y10 billion in its just-ended fiscal year, rather than the Y21 billion profit it had previously forecast.
"Selling (in Kajima shares) may not drag on, as its bottom line is still expected to be in the black," said a local trader.
After the closing bell, Kajima said it has revised down its group net profit outlook for the period to Y13 billion from Y16 billion, and now expects a group operating loss of Y9 billion.
Sanyo Electric shares jumped after going bid-only early, closing up 1.3% to Y154 on six times normal volume, largely on short-covering triggered by a Nikkei report that its group operating profit is likely to rise by some 50% to more than Y45 billion for the fiscal year ending March, 2011--thanks to the strong sales networks of its new parent Panasonic.
"The profit figure could easily change depending on how Sanyo and Panasonic integrate," noted a brokerage analyst, adding that today's buying included a good deal of speculative buying.
Battery maker GS Yuasa also ended up 4.8% at Y667 after a Ministry of Economy, Trade and Industry (METI) report that said hybrid and other advanced "green" cars will likely account for about 50% of new domestic car sales by 2020, up from the current 10%.
