September 5, 2012 / 3:10 AM / 5 years ago

CORRECTED-Nikkei hits new 4-week low on disappointing U.S. data

(Corrects spelling of Sumitomo Mitsui fund manager to Masashi
Oda and Credit Suisse director of equity sales to Stefan
    * 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 low on Wednesday as weak U.S.
manufacturing data and construction spending added to concerns
about a global economic slowdown.
    The Nikkei fell 0.8 percent to 8,702.34 points,
breaking below support at its 75-day moving average of 8,768.78,
leaving it on track to end down for the fifth straight session.
    Traders said bearish bets on China-related stocks also were
pulling the market down. Doubts about the country's growth
prospects on recent disappointing data pushed down the Nikkei
China 50, an index of 50 Japanese companies with high
exposure to China, by 1.2 percent.
    "Investors in the Japanese market are primarily worried
about China right now, although the U.S. data made investors
more keen to watch what happens with the jobs data out on
Friday," said Masashi Oda, chief investment officer at Sumitomo
Mitsui Investment Trust.
    Oda said that expectations that the European Central Bank
will act to lower borrowing costs for countries such as heavily
indebted Spain and Italy at its meeting on Thursday were largely
priced into the market. 
    Komatsu Ltd dropped 2.9 percent and Hitachi
Construction Machinery Co Ltd lost 2.9 percent after
U.S. construction spending in July fell by the most in a year. 
    Concerns about flagging growth in the world's largest
economy were further reinforced after U.S. manufacturing
contracted for a third straight month in August. 
    However, recent disappointing data has fuelled hopes of
further stimulus from the U.S. Federal Reserve. Some market
watchers hope it will announce at its meeting next week a third
round of bond purchases, or "quantitative easing".
    "For those in the market that are pricing in QE3, hopefully
the jobs data is not too good to take it off the Fed's table,"
said Stefan Worrall, director of equity cash sales at Credit
Suisse in Tokyo.
    "But the key message for me is that the data in the U.S. is
better in parts... as far as autos and housing are concerned,
the recession is over."
    Automakers outperformed the broader market on strong
year-on-year U.S. sales in August, with Toyota Motor Corp
 advancing 0.8 percent after reporting a 46 percent
increase and Honda Motor Co inching up 0.4 percent
after seeing sales grow a massive 59.5 percent.
    However, Nissan Motor Co slipped 1.1 percent after
its sales increased by just 7.6 percent.
    The broader Topix dropped 0.9 percent to 720.24 in
moderate trade, with volume at 47.8 percent of its full-day
90-day average.
    Bucking the market, Chubu Electric Power Co Ltd 
rose 3.8 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 of Sumitomo Mitsui Investment
Trust said.
    "It is also the electric power company that had the lowest
reliance on nuclear power so it has a more stable income than
the others." 
    Chubu's gains left the electric and gas subindex 
flat, outperforming the wider market. However, the sector 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.  
    Elsewhere, shares of cash-strapped computer services
provider NEC Corp slid 5.3 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
 ($1 = 78.3900 Japanese yen)

 (Additional reporting by Dominic Lau; Editing by Kim Coghill)

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