Tokyo, Jan. 27 (Jiji Press)–Stocks erased their earlier gains to finish moderately lower on the Tokyo Stock Exchange Tuesday, as investors moved to reap profits for now amid a growing wait-and-seemood ahead of a series of earnings reports by major Japanese firms including high-tech makers.
The 225-issue Nikkei average climbed to as high as 11,075.30 with a gain of more than 100 points in the morning on the back of U.S. stocks’ sharp gains overnight.
But it gradually lost steam and finished the day’s session at 10,928.03, down 44.57 points from Monday, after sinking to as low as 10,916.51 just before the close. The key market gauge lost 96.41 points on Monday.
The TOPIX index of all first-section issues was down 5.49 points to close at 1,063.36. The index finished down 8.08 points in the previous session.
“Profit taking by overseas hedge funds and short-term individual investors battered Tokyo stocks, helping them wipe out their earlier gains,” said Hiroichi Nishi, equity general manager at Nikko Cordial Securities Inc.
A wait-and-see sentiment grew strong, with players keeping careful eyes on major high-tech companies’ announcements of their earnings for the October-December third quarter of fiscal 2003, starting in earnest on Tuesday, brokers said.
Players are concerned that the market may not react to any strong earnings figures as it has already discounted upbeat results, they said.(MORE)Tokyo Stocks Fall on Profit Taking ahead of Earnings Reports
Decliners outnumbered gainers 956 to 451 on the TSE’s first section, while 122 issues ended flat.
Volume totaled 1,061 million shares against Monday’s 1,215 million shares.
Fumiyuki Nakanishi, equity strategist at SMBC Friend Securities Co., showed concerns about recent trading patterns of foreign investors, saying, “Having bought Japanese shares aggressively in early January, foreigners may have now started to cash in on gains.”
Brokers cited the yen’s renewed strength against the dollar as another damper on the stock market.
The U.S. currency briefly slid below 106 yen in Tokyo Tuesday morning for the firtst time since Jan. 16, before rallying back above the line on Finance Minister Sadakazu Tanigaki’s remark that showed Japanese monetary authorities’ readiness to carry out yen- selling, dollar-buying intervention to check speculative dollar sales.
The stock market has been extremely nervous about currency movements with the approach of the Group of Seven meeting of finance ministers and central bank chiefs in Florida Feb. 6-7, as a strong yen will hurt Japanese exporters’ earnings and their competitiveness in overseas markets, brokers said.(MORE)Tokyo Stocks Fall on Profit Taking ahead of Earnings Reports
Major consumer electronics makers were broadly lower, including Sony, Matsushita Electric Industrial, Toshiba, Mitsubishi Electric and Fujitsu.
On the other hand, Sharp, a key player in Japan’s digital consumer electronics scene, jumped to rewrite its 2003-to-date high. Chipmaking equipment maker Advantest inched up.
The Big Four banking groups of Sumitomo Mitsui, UFJ, Mizuho and Mitsubishi Tokyo turned higher after logging sharp losses the previous day.
Japan Airlines System and All Nippon Airways ceded ground on concerns that the spread of avian flu in Asia could dampen demand for overseas travel.
Automakers Toyota, Honda and Nissan came under selling, as did telecom carriers NTT, KDDI and NTT DoCoMo.END
