Nikkei slips as earnings disappointments hit Sharp, Tokyo Electron
* Tokyo Electron, JAL fall after disappointing guidance * Sharp sags, sources say to post worse-than-f'cast net loss By Dominic Lau TOKYO, May 1 (Reuters) - Japan's Nikkei average slipped on Wednesday, after posting its best April performance in 20 years, with Sharp Corp and semiconductor equipment maker Tokyo Electron Ltd tumbling on disappointing earnings news. Gains in Fujifilm Holdings Corp and Kao Corp after their quarterly earnings helped support the market. The Nikkei eased 0.4 percent to 13,812.21 after rallying 11.8 percent last month, marking its best April performance since 1993 and a ninth straight month of gains -- its longest such winning streak since May 2005 to January 2006. "The fundamental view (on corporate profit growth) is still sluggish," said Shun Maruyama, chief Japan equity strategist at BNP Paribas. "The market has already priced in the effect of the currency weakness. If we exclude the currency weakness, companies are still bearish in the economic recovery forecast for the current term and the next." "In the shorter-term, we have no choice but to recommend to take profits," he said, but added that he remained upbeat on the Nikkei and expected the benchmark to hit 15,000 by year-end. Expectations that Japanese firms would sharply raise their earnings forecast for the fiscal year ending March 2014 had been high after the yen weakened 21 percent since mid-November, when Shinzo Abe, who became prime minister in December, promised expansionary monetary and fiscal policies to revive the world's third-largest economy. During the same period, the Nikkei has rallied nearly 60 percent. Struggling Sharp Corp sagged 3.9 percent on news the liquid crystal display maker was expected to post a worse than forecast 500 billion yen net loss in the year that ended March 31, two sources with knowledge of the matter told Reuters. Short-selling interest in Sharp remained high, although it was off its high, with 86.27 percent of its stock that is available to be borrowed out on loan as of April 29, down from 87.24 on April 22, according to data provider Markit. Tokyo Electron dropped 4 percent after it forecast an operating profit of 18 billion yen ($185 million) for the year ending March 2014, coming in below an average of 21 billion yen from 18 analysts polled by Thomson Reuters I/B/E/S. It was the top-weighted loser in the Nikkei. Japan Airlines also disappointed investors with its earnings guidance for the current business year. Its stock lost 4.4 percent after hitting its highest level since relisting in September in the previous session. Still, there are encouraging signs in the corporate sector. Of the 57 companies that have reported quarterly figures so far, 53 percent of them either beat or met market expectations, according to Thomson Reuters StarMine. That compared with 38 percent in the previous quarter. The securities sector also succumbed to profit-taking, down 0.7 percent after surging 4.5 percent in the previous session after Nomura Holdings Inc, Japan's top brokerage, reported strong quarterly results on Friday. The Japanese markets were closed on Monday for a public holiday. Nomura fell 1.6 percent and was the most traded stock on the main board by turnover. The broader Topix index fell 0.5 percent to 1,159.35 on Wednesday morning. Fujifilm jumped 6.1 percent and was the fourth top-weighted gainer after its operating profit came in slightly above its own forecast for the year ended March, while its forecast for the current business year was a touch ahead of market consensus. Kao Corp was the fifth top-weighted gainer, up 2.7 percent after its first quarter earnings.
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