May 28, 2018 / 7:08 AM / 3 months ago

Tokyo shares struggle to maintain gains; falling oil prices drag on energy names

* Some positive developments seen in geopolitics

* Oil selloffs weigh on oil-related shares

* Airlines gain on lower oil prices

* Trading subdued with US, UK markets closed for holidays

By Tomo Uetake

TOKYO, May 28 (Reuters) - Japanese shares ended little changed on Monday as a further slide in oil prices pulled down energy-related stocks, offsetting initial gains stemming from renewed hopes for a U.S.-North Korea summit next month.

The benchmark Nikkei share average closed up 0.1 percent at 22,481.09, giving up much of the 0.4 percent gain seen in early trade.

The broader Topix slipped 0.1 percent to 1,770.42, with the JPX-Nikkei Index 400 closed virtually flat at 15,662.22.

As oil prices extended their sharp declines on Monday, oil refinery and exploration companies were hit hard, with Japex and JXTG shedding 3.2 and 4.2 percent, respectively.

But lower fuel prices benefited the air transport sector, with its index, advancing 1.9 percent.

Although the Nikkei had opened higher on optimism that the historic summit between United States and North Korea may be back on track, most investors were cautious and kept to the sidelines.

“Although there are some new developments in geopolitics — the revived talks for U.S.-North Korean summit and Italian president’s decision to defend the euro — these are reasons ‘not to sell’, rather than ‘to buy,’” said Yuya Fukue, trader at Rheos Capital Works.

President Donald Trump said on Sunday a U.S. team had arrived in North Korea to prepare for a proposed summit with North Korean leader Kim Jong Un, which Trump pulled out of last week before reconsidering.

Developments in Italy were also giving investors pause.

Italy’s president rejected the nomination of a prominent eurosceptic for the key economy ministry, a decision that led to a collapse in efforts to form a coalition government, triggering a possible constitutional crisis and opening the prospect of fresh elections.

Trade was subdued, with turnover of just 1.81 trillion yen, the lowest in nearly two months, as British and U.S. markets were closed on Monday for the spring bank holiday and Memorial Day, respectively. (Reporting by Tomo Uetake; Editing by Kim Coghill and Eric Meijer)

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