May 10, 2012 / 7:00 AM / 7 years ago

Nikkei slides toward 9,000 in choppy trade

* Nikkei ends down; approaches trough, says Nomura
    * Toyota makes modest gain on positive forecast
    * Gree, DeNA rebound, to scrap gambling games
    * Tepco surges on government capital injection, takeover

    By Sophie Knight	
    TOKYO, May 10 (Reuters) - Japan's Nikkei average slid 0.4
percent on Thursday after lurching in and out of positive
t e rritory as bargain hunting was offset by poor Chinese trade
figures and concerns that euro zone instability could further
derail global growth. 	
    "Dip-buying provided support after the Nikkei pierced 9,000,
but investors were tentative and lacked conviction," said
Norihiro Fujito, senior investment strategist at Mitsubishi UFJ
Morgan Stanley. 	
    Toyota Motor Corp rose 0.8 percent in heavy trade
after positive earnings, helping to pare the index's losses,
along with a robust performance from the utility sector
    The Nikkei closed at 9,009.65, while the broader Topix
headed 0.1 percent down to 765.42. 	
    The Bank of Japan's record purchases of 39.7 billion yen of
exchange-traded funds on both Monday and Wednesday failed to
prevent the benchmark index falling to an intraday low of
8,895.90, its lowest points since the bank announced an
expansion of its asset purchase programme on Feb. 14.	
    "Until there are new developments in European politics and
more positive news from the U.S. and China, the yen is going to
continue to strengthen and Japanese stocks will be sold off,"
said Fujito. "It's entirely possible that the Nikkei will open
tomorrow in the 8,000s and tread around there." 	
    Concerns about slowing growth in China heightened after the
country said imports grew just 0.3 percent in April compared to
the previous year, far below expectations for an 11 percent
increase in a Reuters poll and weaker than the 5.3 percent
year-on-year increase in March. 	
    Exports rose just 4.9 percent year-on-year, undershooting
analyst expectations for 8.5 percent growth, which market
watchers said was likely due to the poor economic climate in the
euro zone, which imports a fifth of China's exports.	
    Strong jobs data from Australia helped propel the Nikkei
into positive territory during the morning session, but the
effect was short-lived.	
    "The market's tone is very bearish and so anything which 
breaks that tone or is different from that tone has an amplified
effect," said Stefan Worrall, director of equity cash sales at
Credit Suisse in Tokyo. 	
    Investors retreated to defensive stocks, with utilities
putting on a solid 2.9 percent. The sector was bolstered by
Tokyo Electric Power Co's gain of 6.5 percent after the
Japanese government acquired over 50 percent of the utility,
which owns the devastated Fukushima nuclear plant. 	
    Japanese markets began to unravel on Monday after poor U.S.
jobs data and the rejection by Greek voters of a bailout deal in
an election, sparking fears the country may leave the euro zone.	
    Greek socialist leader Evangelos Venizelos will make a
last-ditch attempt to form a government on Thursday and avoid a
new election.  	
    Trading volume on the main board was up from yesterday's 1.8
billion, but at 95 percent of its 90-day average.	
    Nomura said it expected the market correction since the
one-year high of 10,255.15 on March 27 to end soon, with May 14,
25, 28 or June 8 among the possible days it could hit a trough. 	
    "We think the correction from March 27 is now in its final
stages and the question is now the timing of the bottom," Nomura
technical analyst Shoichiro Yamauchi said in a note.	
    On Thursday the benchmark broached its 200-day moving
average near 9,053.12.	
    Social gaming companies Gree Inc and DeNA Co Ltd
 rebounded after a battering earlier in the week,
limiting damage to the wider market, after they responded to
pressure from regulators and agreed to gradually phase out games
that contain aspects of gambling. 	
    Gree advanced 2.4 percent and was the second-heaviest traded
stock on the main board by turnover, ahead of DeNA, which jumped
7 percent and reported 2011/12 earnings ahead of market
    Renasas Electronics Corp, which leads the global
automotive semiconductor market, plunged 14.3 percent after
reporting a wider-than-expected annual operating loss and
failing to give guidance for the current year, fanning fears it
may need support from the government or parent companies.	
    The company has been hit by a persistently strong yen as
well as last year's earthquake in Japan and floods in Thailand,
which disrupted production.
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