April 19, 2011 / 7:28 AM / 8 years ago

Nikkei hits 3-week low after Texas Instruments, S&P

 * S&P's outlook cut to have limited impact-analyst
 * Chip shares fall on poor TI earnings
 * Sony Ericsson earnings eyed for quake impact
 * TDK plunges after Goldman says to be hurt be Samsung
 * Nikkei down 1.2 percent, hits 3-wk low
 By Antoni Slodkowski and Ayai Tomisawa	
 TOKYO, April 19 (Reuters) - Tokyo stocks hit a three-week
low on Tuesday after chipmaker Texas Instruments warned the
impact from Japan's earthquake last month would result in slower
sales growth and after the yen climbed on Standard & Poor's
threat to cut its U.S. credit rating.	
 While market participants said that the impact from the
S&P's move would likely be temporary, weaker U.S. earnings have
begun to reveal the severity of the state of global supply
chains after the March 11 quake, putting more pressure on shares
before Japanese firms start reporting next week.	
 Texas Instruments said it was contending with supply
shortages as well as damage to its own factories and those of
its customers in Japan. [ID:nN18221973]	
 "We need to look at demand. We already know about problems
with supplies due to the quake, but I'm worried that if a drop
in demand is behind TI's weaker earnings, that may dampen the
sentiment for stocks further," said Kiyoshi Noda, chief fund
manager at MU Investments.	
 In thin trade, the Nikkei fell 1.2 percent or 115.62 points
to 9,441.03, breaking out a trading range between 9,516 and
9,822 that had been in place for the last few weeks. Decliners
outnumbered advancers 1,281 to 274.	
 The broader Topix shed 1.1 percent to 827.56.	
 Already hit by fears that Greece will have to restructure
its mountain of debt, Standard & Poor's threat to downgrade the
United States' prized AAA credit rating sent the yen rising
broadly as it provided investors with a timely excuse to dump
long positions on currencies like the Aussie dollar.	
"S&P's downgrade of its U.S. credit outlook may have a
short-term impact on Japan stocks in terms of concerns about the
stronger yen," said Makoto Nagahori, head of sales trading at
Instinet. "But its long-term impact should be limited."	
 The yen extended gains on Tuesday as more market players cut
back on carry trades, but the move will likely be short-lived as
hedge funds and Japanese life insurers positioned for the yen to
resume its slide before long. [ID:nL3E7FJ0CC]	
 Trading volume on the Tokyo stock exchange's first section
was 1.8 billion shares, below last week's daily average of 2.1
billion.	
 "I'm getting worried about declining volumes in the market.
Many participants are simply taking a wait-and-see stance. Aside
from the Bank of Japan, who appears to be supporting the market
by buying ETFs, there are extremely few players that are active
in the market now," said Toru Hashizume, chief investment
officer at Stats Investment Management.	
 The BOJ's data showed the bank has bought 107 billion yen in
exchange traded funds since the March 11 quake, usually stepping
in when the market lost more than one percent.	
 Upcoming earnings in focus include Apple Inc , which
may provide signs that the Japanese crisis is pressuring margins
while Japanese firms reporting next week include Honda 
and Canon .	
 Texas Instruments' results hit chip-related stocks with
Renesas falling 5.4 percent to 678 yen and Advantest
 dropping 3.2 percent to 1,405 yen.	
 TDK Corp plunged 7.6 percent to 3,980 yen in heavy
trade after Goldman Sachs cut the firm's target price, saying
TDK earnings could be hit if Samsung Electronics ,
which sources HDD heads exclusively from TDK, sells its HDD
operations to Seagate Technology , a possibility that has
been reported by the Wall Street Journal. [ID:nL3E7FH0IR] 	
	
 (Editing by Edwina Gibbs)	
 
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