Nikkei falls to 1-week low, SoftBank dives on selloff in U.S. tech stocks

Sun Apr 6, 2014 10:00pm EDT

* SoftBank dives in wake of selloff in U.S. tech stocks
    * Daiichi Sankyo soars after Sun Pharma buys Indian unit
Ranbaxy
    * U.S. jobs data positive but overshadowed by Wall Street
slide

    By Ayai Tomisawa
    TOKYO, April 7 (Reuters) - Japan's Nikkei share average
tumbled to a one-week low on Monday morning after a slide on
Wall Street overshadowed encouraging U.S. jobs data, and index
heavyweight SoftBank Corp dived in the wake of a
sell-off in U.S. tech names.
    Traders said SoftBank shares have become very sensitive to
moves in U.S. tech stocks ahead of Alibaba's IPO, which is
expected to become one of the largest offerings in history.
Alibaba said last month that it is planning its initial public
offering in the United States.
    SoftBank declined 4.3 percent lower and was the most traded
stock by turnover.
    It was a disappointing session on Wall Street on Friday as
last year's big winners mostly in the tech and bio tech sectors
suffered a punishing selloff, taking the gloss off a relatively
strong U.S. March jobs report. 
    "SoftBank is a 'champion stock' among Japanese tech stocks
so foreign investors are unloading it from their portfolios,"
said Norihiro Fujito, senior investment strategist at Mitsubishi
UFJ Morgan Stanley Securities. "What's happening in the U.S.
market is happening in the Japanese market today."
     The Nikkei dropped 1.6 percent to 14,817.33 in
mid-morning trade after falling as low as 14,808.81 earlier, the
weakest since April 1.
    Some analysts said the improving U.S. economic outlook will
help to eventually spur demand for Japanese products and in turn
boost the market. 
    "In the mid-to-long term, a recovery in the U.S. economy
will lift demand for Japanese products. It will also lift the
dollar level to the yen," said Kenji Shiomura, an analyst at
Daiwa Securities.
    On Monday, exporters lost ground after the dollar retreated
from a 2-1/2 month high of 104.13 yen to last stand at
103.25. Honda Motor Co shed 2.1 percent, Hitachi Ltd
 fell 2.6 percent, and Tokyo Electron Ltd sank
3.3 percent.
    Bucking the weakness, Daiichi Sankyo Co rose 5.1
percent to 1,844 yen, the highest since late January after
saying that Sun Pharmaceutical Industries Ltd will buy
its Indian unit Ranbaxy Laboratories Ltd.
 
    The broader Topix index dropped 1.4 percent to
1,199.21 while the new JPX-Nikkei Index 400 fell 1.3
percent to 10,882.68.

 (Editing by Shri Navaratnam)
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