Nikkei drops in choppy trade; Toshiba up on chip unit sale

TOKYO: Japanese stocks pulled back from a recent 3-1/2 month high on Tuesday, hit by profit-taking, though bank shares staged a rally on hopes of strong earnings for the sector.

The Nikkei share average ended 0.2 percent lower to 22,818.02 after trading in positive territory in early trade.

Traders said with the Nikkei reaching resistance of 23,000, profit-taking may accelerate especially in the face of geopolitical tensions in the Middle East.

“Japanese companies’ earnings were almost over and the market has mostly priced in the results. Investors may take profits from the recent rises in stocks as there are potential selling catalysts globally,” said Hikaru Sato, a senior technical analyst at Daiwa Securities.
Tuesday’s losers include real estate companies, with Mitsubishi Estate stumbling 5.2 percent and Mitsui Fudosan falling 3.1 percent.

Toshiba Corp was under the spotlight, rising 3.5 percent after it said it expects net income to jump 33 percent this financial year thanks to profits from the planned $18 billion sale of its memory chip unit. It also said that it would return benefits to shareholders after it sold its chip unit.

The banking sector rose 1.2 percent, with Mitsui Sumitomo Financial Group advancing 2.1 percent after it reported a 3.9 percent rise in annual net profit helped by lower bad loan costs and gains from equity holdings.

It also said it would buy back up to 1.4 percent of its own shares worth 70 bln yen.
Mitsubishi UFJ Financial Group and Mizuho Financial Group, which will report their earnings after the market close, rose 1.7 percent and 0.8 percent, respectively.

Leave a Reply