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Nikkei snaps 5-day winning run on profit-taking, volume highest in 23 mths
February 5, 2013 / 7:11 AM / 5 years ago

Nikkei snaps 5-day winning run on profit-taking, volume highest in 23 mths

* Market awaited Toyota earnings
    * Nikkei's upside seen at 10,300 for short-term - analyst
    * Hitachi sags after cutting forecast
    * Panasonic shoots to one-year high

    By Ayai Tomisawa
    TOKYO, Feb 5 (Reuters) - Japan's Nikkei share average fell
on Tuesday, snapping a five-day winning streak as renewed
worries about the euro zone crisis triggered profit-taking from
recent gains, with the benchmark pulling away from a 33-month
high hit the previous day. 
    The Nikkei dropped 1.9 percent to 11,046.92, moving 
away from a 33-month closing high of 11,260.35 hit on Monday.
The Nikkei's volume hit 3.85 billion shares, the highest level
since March 2011.
    With the Nikkei adding 4 percent in the past five days,
investors took renewed concerns about the euro zone debt crisis
as a reason to lock in profits.
    In Europe, Spanish and Italian bond yields rose after a
corruption scandal prompted calls for Spanish Prime Minister
Mariano Rajoy to resign and on news of a probe of alleged
misconduct involving an Italian bank three weeks before national
elections.
    "The Nikkei is seen rising further in the longer term, but
the market has been looking for a correction. In the short term,
the Nikkei's resistance is seen around 11,300," said Tsutomu
Yamada, a market analyst at Kabu.com Securities. Yamada added
that if the Nikkei breaches this level, the highest since April
2010, it will likely enter the next stage to chase the market
higher to 12,000.
    With Japanese corporate earnings in full swing, on Tuesday,
investors carefully awaited bellwether earnings such as from
Toyota Motor Corp after the market close.
    Toyota raised its annual net profit forecast by more than 10
percent to 860 billion yen ($9.3 billion) on strong sales of the
Camry sedan and other vehicles in its biggest market the United
States, as well as the yen's drop. 
    Some companies disappointed the market, with Hitachi Ltd
 falling 6.4 percent as the industrial machinery firm
sliced 13 percent off its full-year operating profit outlook,
citing sluggish demand in Europe and a slowdown in emerging
markets. 
    But Panasonic Corp rose as much as 12 percent
before closing up 3.9 percent as it extended gains from Monday,
after reporting a third-quarter operating profit, turning around
from a loss the previous year. 
    "It looks like hot money as well as some short-covering. Its
results were not particularly unexpected, but once the price
started going up, a lot of retail investors piled in," said
Masato Futoi, head of cash equity trading at Tokai Tokyo
Securities. 
    Japan Airlines Co Ltd was also in favour, ending up
5.1 percent after rising as much as 7.6 percent to its highest
level since its public offering last September, as the airline
hiked its operating profit forecast by 12.7 percent to 186
billion yen ($2 billion) for the year to March 31. 
    The airline estimated the impact on its earnings from the
grounding of Boeing's Dreamliner jet at around 700
million yen ($7.6 million) for the rest of this fiscal year, but
said it will discuss compensation with Boeing. 
    
    RECENT GAINERS LOSE GROUND
    Some of the most sluggish stocks on Tuesday were those that
had gained sharply over the past 2-1/2 months on hopes that
Prime Minister Shinzo Abe's brand of aggressive monetary and
fiscal policy would reinvigorate the economy.
    The real estate sector, which has soared around
27 percent since mid-November, sagged 5.3 percent, while the
insurers' sub-index, which has shot up 38 percent
over the past 2-1/2 months, dropped 3.8 percent.
    "The market has been moving on expectation and speculation
for months, but investors might start looking at the
here-and-now soon," said Ryota Sakagami, chief strategist of
equity research at SMBC Nikko Securities.
    "Companies that would benefit from a return to inflation -
insurance, real estate and banks - might cool down because that
hasn't actually happened yet, while the winners from a weaker
yen will remain in focus because that's very real," he added. 
    The yen moved further off a fresh 33-month low hit on Monday
morning of 93.185 against the dollar, to 92.38 by Tuesday. The
Japanese currency's 14 percent slide since mid-November has
propelled up exporters, whose overseas revenues will be swollen
by a softer yen. 
    Index heavyweight Fast Retailing Ltd, the operator
of the Uniqlo clothing chain, fell 3.2 percent after its
same-store sales fell 5.5 percent in January from a year
earlier, citing fewer weekend days in the month. 
    The broader Topix fell 1.7 percent to 939.70 in
heavy trade, with 4.8 billion shares changing hands, the highest
level since March 2011.

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