Nikkei at 4-week low, drops below support after weak U.S. data

Tue Sep 4, 2012 9:58pm EDT

* Low U.S. construction spending hits Komatsu
    * Chubu Electric dividend gives rare boost to utilities
    * Fast Retailing sags; sales undershoot market expectations

    By Sophie Knight
    TOKYO, Sept 5 (Reuters) - Japan's Nikkei share average
struck a fresh four-week intraday low on Wednesday morning after
weak U.S. manufacturing data and construction spending added to
concerns about a global economic slowdown.
    A risk-off atmosphere pervaded as some market players
worried about a lack of detail in the European Central Bank's
plan to bring down high borrowing costs for heavily indebted
Italy and Spain, which it is expected to unveil at its meeting
on Thursday.
    The Nikkei edged down 0.5 percent to 8,735.90,
breaking below support at its 75-day moving average of 8,768.78.
    Komatsu Ltd dropped 1.4 percent and Hitachi
Construction Machinery Co Ltd lost 1.3 percent after
U.S. construction spending in July fell by the most in a year,
reinforcing fears of flagging growth in the world's largest
economy.
    "The figures are not good and I think it makes investors
even more keen to watch what happens with the U.S. jobs data out
on Friday, which may well determine the Fed's decision on
further stimulus at the FOMC next week," said Masashi Oda, chief
investment officer at Sumitomo Mitsui Investment Trust.
    Index heavyweight Fast Retailing Co Ltd also
weighed on the Nikkei, falling as much as 1.6 percent to a
three-week low after its Uniqlo stores reported a 2 percent
increase in August domestic same-store sales, coming in below
market expectations.
    Shares of cash-strapped computer services provider NEC Corp
 fell 1.8 percent after a Reuters report that the
company would sell its entire stake in China's Lenovo Group Ltd
 for about 18 billion yen ($230 million).
 
    Bucking the market, Chubu Electric Power Co Ltd 
rose 4.8 percent after the utility said it would begin paying an
annual dividend of 50 yen in the year ending March 2013, despite
forecasting an operating loss of 45 billion yen ($574 million)
in the same period. 
    "Chubu is very aware that it needs to entice or appease its
shareholders because its share price has fallen so much it will
have to issue more bonds," Oda said. "It was also the electric
power company with the lowest reliance on nuclear power so it
has a more stable income than the others." 
    Chubu's gains pushed the electric and gas subindex
 up 0.5 percent, making it the best-performing sector
on the Topix. However, it is down 26 percent this year after
falling 44 percent in 2011, as utilities have been hit by
soaring bills for oil and natural gas as most of Japan's nuclear
reactors remain offline. 
    The broader Topix dropped 0.5 percent to 722.91.
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