(Fixes grammar in 9th paragraph)
* SoftBank contributes hefty negative points to Nikkei
* Wall Street drop, Ukraine tensions curb risk appetites
By Ayai Tomisawa
TOKYO, Aug 6 Japanese stocks dropped to a
2-1/2-week low on Wednesday morning, hit by a sharp slide in
SoftBank Corp after its U.S. subsidiary Sprint Corp
abandoned its bid to acquire T-Mobile U.S. Inc.
The mood was already bearish on Wall Street's decline over
tensions in Ukraine, which dragged the Nikkei share average
down 0.8 percent to 15,190.99 in mid-morning trade. The
index fell to an intra-session low of 15,187.15, the weakest
since July 18.
Index heavy-weight SoftBank tumbled 4.8 percent and was the
most traded stock by turnover, and accounted for a hefty 30
negative points - more than a quarter of the Nikkei's losses.
Reuters reported that Sprint has pulled its bid to acquire
No. 4 U.S. carrier T-Mobile because the challenge of securing
regulatory approval for the deal was too steep, citing a person
familiar with the matter.
The announcements would signal the end of a prolonged push
by Sprint's parent company, SoftBank, to acquire rival T-Mobile.
Analysts said investors were generally cautions given the
tensions in Ukraine and other negative news, including
Argentina's debt crisis. Still, the main focus for many remains
the timing of the U.S. Federal Reserve's rate tightening-cycle,
"Ukraine worries have become a reason to take profits. But
the real concern in the market is when the Fed will raise
interest rates," said Norihiro Fujito, a senior investment
strategist at Mitsubishi UFJ Morgan Stanley Securities. "The
market has started to look beyond a 'post-tapering' market."
Data on Tuesday showed U.S. services sector activity hit an
8-1/2 year high last month and factory orders surged in June,
which fanned speculation Fed policymakers would speed up rate
hikes now expected in 2015.
Investors are also focused on quarterly corporate earnings,
which have so far come in largely above expectations.
Masayuki Doshida, senior market analyst at Rakuten
Securities, said that companies with good earning outlooks such
as Bandai Namco Holdings are in demand. The stock
jumped 12 percent.
Toyota Motor Corp posted a forecast-beating 4.4
percent rise in April-June operating profit and raised its North
America vehicle sales target for the year to next March, boosted
by strong sales of SUVs and pickup trucks in the United States,
its biggest market.
Toyota, however, dropped 0.7 percent as it stepped back from
three-week highs hit last week.
Other exporters including Honda Motor Co and Sony
Corp shed 0.7 percent and 1.9 percent.
The broader Topix dropped 0.9 percent to 1,252.16,
and the JPX-Nikkei Index 400 also declined 0.9
percent to 11,399.68.
(Additional reporting by Hideyuki Sano; Editing by Shri