April 12, 2011 / 7:05 AM / in 8 years

Nikkei drops on quake impact worries, oil

 * Nikkei sinks below support at 9,612.51
 * Nikkei's mid-term support seen book value at 8,800-analyst
 * Strong aftershocks keep investors on edge -fund manager
 * Selling in blue-chip shares as earnings worries weigh
 * Oil, gas stocks track commodities decline
 By Ayai Tomisawa and Antoni Slodkowski	
 TOKYO, April 12 (Reuters) - Tokyo stocks tumbled, dropping
for a second straight day on Tuesday, on growing worries that
the impact of the March 11 earthquake may be more severe than
hoped for and as Japan put its nuclear crisis on par with
Chernobyl.	
 Car and electronics makers were sold off while declines in
oil prices spurred profit-taking in energy-related shares,
pushing the Nikkei stock average below key support of 9,612.51,
where April options settled last week.	
 "The market had until now thought that the quake's impact
would be felt most severely in the April-June quarter, but it
seems it may drag on for at least another quarter, and will keep
the market depressed for much longer," said Hideo Arimura, a 
senior fund manager at Mizuho Asset Management.	
 Underscoring those worries, Japan's economics minister
warned on Tuesday that the economic damage from last month's
earthquake and tsunami is likely to be worse than initially
thought as power shortages will crimp factory output and disrupt
supply chains. [ID:nL3E7FC092]	
 "There could be more negative news related to poor earnings
estimates by manufacturers this fiscal year," said Kenichi
Hirano, a strategist at Tachibana Securities. "If that happened,
 the Nikkei could go as low as 9,300 this week."	
 Meanwhile, Toyota warned late on Monday that the uncertain
supply of parts could threaten its output of vehicles through
July, the latest sign of trouble for the global auto industry
stemming from the earthquake.[ID:nN1192492]	
 The world's largest carmaker fell 0.6 percent to 3,240 yen
after falling to an intraday low of 3,200, while other
manufacturers and blue-chip exporters also slipped. Sony Corp
 slipped 2.9 percent to 2,502 yen. 	
 U.S. crude oil futures extended losses by more than $2 on
Tuesday on concern high fuel prices will hurt demand and as
Goldman Sachs advised investors to lock in trading profits after
a rally this year in many commodity markets.	
 U.S. crude for May delivery CLc1 hit a session low of
$107.87, or down $2.05 a barrel. [ID:nL3E7FC0BD]	
 The Nikkei fell 1.7 percent or 164.44 points to 	
9,555.26. The broader Topix index dropped 1.6 percent to	
838.51.	
 Immediate support is seen at 9,500 -- a low hit during a
massive post-quake selloff a month ago.	
 Seiichiro Iwasawa, chief strategist at Nomura Securities,
said that the Nikkei should be supported above 8,800 mid-term,
the book value of the benchmark, even if more negative news hit.	
 Trading volumes remained thin as the market awaited U.S.
corporate earnings, which may yield clues about the damage to
the global supply chain and after that Japanese earnings reports
in late April and early May.	
 Only 2.23 billion shares changed hands on the Tokyo stock
exchange's main board, compared with the 2.6 billion 	
shares traded daily on average last week. 	
     	
 OIL STOCKS SOLD	
 Shares of Tokyo Electric Power Co , the operator of
the stricken Fukushima Daiichi nuclear power plant, fell 10
percent in volatile, heavy trade to 450 yen although it had
climbed as high as 539 yen at one point after Vice Trade
Minister Tadahiro Matsushita said he was not considering
nationalisation of the company.	
 Some 253 million Tokyo Electric shares changed hands, the
second-largest amount since the March quake and accounting for
more than 10 percent of trade on the bourse's first section.    	
 Engineers put out a fire at the plant which started after
another major aftershock rocked eastern Japan, swaying buildings
in central Tokyo and closing Narita airport
runways.[ID:nL3E7F80U1][ID:nL3E7FB2TZ] 	
 There has been many large aftershocks since Monday,
including one on Tuesday afternoon.	
 "I feel the market is being undermined by a series of
aftershocks that we've been experiencing recently," said Ryosuke
Okazaki, chief investment officer at ITC Investment Partners
Corp.	
 Shares of oil and gas developers Inpex Corp and
Japan Petroleum Exploration Co (Japex) succumbed to
profit-taking as oil extended the previous day's decline amid
mounting concerns that rising fuel costs will erode demand and
threaten the global economic recovery.	
 Inpex, Japan's biggest oil and gas developer and one of the
biggest post-quake outperformers -- up 13 percent since the 
quake -- fell 5.2 percent to 620,000 yen. Japex lost 3.5 percent
to 4,010 yen.	
 Analysts said that while falling commodities prices will
pressure energy stocks, in the long run they will also help to
ease worries over the impact of rising raw material costs on
input costs and margins, providing some support to the market.	
	
 (Additional reporting by Chikafumi Hodo; Editing by Edwina
Gibbs)	
 
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