Nikkei snaps 12-week winning streak, euro zone worry prompts pullback

Fri Feb 8, 2013 1:52am EST

* Sony dives 10 pct after poor quarterly results
    * Fujitsu rises on chip unit restructure
    * JAL, ANA robust after news of Dreamliner test flight

    By Sophie Knight
    TOKYO, Feb 8 (Reuters) - Japan's Nikkei share average
dropped on Friday to mark its first weekly loss in 13 weeks as
sentiment was dented by gloomy comments from the ECB president
on Europe's outlook, while Sony Corp tripped up on
disappointing quarterly results. 
    The Nikkei fell 1.8 percent to 11,153.16, snapping
its longest weekly winning streak in 54 years by ending 0.3
percent down on the week. The benchmark also pulled further away
from a 33-month high of 11,498.42 struck on Wednesday. 
    A sell-off stretched into its second day on concern that the
euro zone will continue to stumble, after European Central Bank
President Mario Draghi said on Thursday that there were more
negative risks in the euro zone than positive ones.
    "It looks as if investors are using this as a reason to sell
off and it seems somewhat far-fetched," said Hiroyuki Fukunaga,
CEO of Investrust, echoing other market players who said
weakness in the euro zone is already priced in. 
    Yet with the Nikkei rising nearly 30 percent from
mid-November, when Prime Minister Shinzo Abe, then a candidate
for leader of the opposition, began calling for aggressive
monetary easing, investors have waited for the right time to
take profits.
    Sony Corp led the losses, tumbling 10.1 percent
after profits in the October-December quarter badly missed
market expectations. It was the second-most traded stock on the
main board. 
    Sony's share price had rocketed 58.5 percent between the
beginning of January to Thursday, catching up with the Nikkei's
sharp gains after lagging through November and December.
    "It is difficult to expect further upside from the current
level," said Mitsushige Akino, chief fund manager at Ichiyoshi
Asset Management. "The question (for investors) is, can Sony
launch a new product which would surprise users and make them
say: 'We want Sony's product, not Apple's, not Samsung's'?" 
    Panasonic Corp and Sharp Corp, which both
saw steep gains after pulling into the black in the third
quarter following deep losses in the previous year, also sagged
on Friday, losing 5.4 and 1.2 percent, respectively.
    Analysts said that investors were staying on the sidelines
on Friday because the yen firmed to 93.31, retreating
from a 33-month high of 94.06 on Wednesday, and also out of
reluctance to take big positions before a three-day weekend.
Markets are closed on Monday in Japan for a national holiday.
    A lull in the yen's slide hit exporters, who have seen
handsome gains on the back of its recent weakness, which boosts
their overseas revenues once repatriated. Canon Inc,
Nikon Corp and Mazda Motor Corp dropped
between 2.3 and 3.5 percent. 
    "In the short term, Japanese shares are likely to see a
correction if the yen does not weaken further," said Chisato
Haganuma, chief strategist at Mitsubishi UFJ Morgan Stanley
Securities.
    But he said that aggressive buying by foreign investors will
likely support the market in the mid-term.
    Analysts also said that heavy trading volume indicates
investors' strong interest in the Tokyo market. On the Tokyo
Stock Exchange's main board, with 5.14 billion shares changing
hands on Thursday, its second highest volume on record.
   The broader Topix dropped 1.2 percent to 957.35 on
Friday, with 4.23 billion shares changing hands, slightly lower
than Thursday.
    
    CHERRIES FOR PICKING
    Fujitsu Ltd bucked the market trend, jumping 5.1
percent to a 10-month high after the company said it would
reorganise its microchip business and join with Panasonic Corp
to combine their struggling LSI chip units, which produce highly
customised chips used in a range of consumer electronics.
    Shares of All Nippon Airways Co Ltd and Japan
Airlines Co Ltd also rose nearly 5 percent after U.S.
agencies cleared Boeing Co to restart test flights of the
787 Dreamliner, which was grounded due to a series of battery
incidents. 
   The two Japanese airlines operate nearly half of the 50
Dreamliners in service, with ANA owning the most with 17,
representing 7 percent of its fleet. 
   GS Yuasa Corp, the battery maker for the Dreamliner,
shed 1.5 percent.