March 6, 2012 / 6:55 AM / 7 years ago

Nikkei slips for 2nd day; bridge makers soar

* Nikkei eases 0.6 pct, down for second day in a row
    * China-related shares fall after 2012 outlook slashed
    * Bridge builders top main board as biggest gainers

    By Dominic Lau and Mari Saito	
    TOKYO, March 6 (Reuters) - Japan's Nikkei share
average slipped for a second day on Tuesday as investors
bagged profits on blue chip stocks following February's 10.5
percent rally, although some attractive valuations and a softer
yen supported sentiment.	
    Honda Motor Co slid 1.9 percent, Sony Corp 
eased 0.8 percent, Panasonic Corp shed 2.1 percent and
Nomura Holdings lost 1.3 percent.	
    Investors opted instead for defensive sectors such as
pharmaceuticals and utilities, up 0.9
percent and 1.2 percent, respectively.	
    The benchmark Nikkei closed 0.6 percent lower at
9,637.63 after losing 0.8 percent on Monday. Mid-last week, the
index touched a 7-month high of 9,866.41.	
    "Over the past couple of days, I've taken profits on some
high-beta stocks such as financials and technology because such
names have sky rocketed in the last couple of weeks. I just trim
down my holdings," said Yasuo Sakuma, a portfolio manager at
Bayview Asset Management.	
    Sakuma said he was waiting for further market weakness
before adding to his positions.	
    "We're in an excess liquidity driven market," he said,
predicting the Nikkei would not correct more than 3 percent in
the next two weeks.	
    March, the final month of Japan's fiscal year, tends to be
the strongest month for the Nikkei, with an average monthly rise
of 1.43 percent for the index between 1972 and 2011.	
    Reflecting that, the Nikkei volatility index, a fear
gauge, fell 2.8 percent on Tuesday. The lower the volatility
index, the higher the risk appetite.	
    China-related shares extended losses for a second session,
with the Nikkei China 50 index down 1.4 percent after
the world's second-largest economy cut its 2012 growth target to
an 8-year low of 7.5 percent, as Beijing looks to reduce its
reliance on external spending and foreign capital.	
    Among China-related shares, construction machinery maker
Komatsu Ltd slid 2.3 percent and industrial robot maker
Fanuc Ltd shed 2.5 percent. 	
    "The news of China cutting its growth outlook came out
during market hours yesterday and although there was selling of
China-related stocks afterwards (in Japan) they are extending
losses today based on U.S. market reaction," said Masayuki
Doshida, a senior market analyst at Rakuten Securities.	
    The broader Topix stock index fell 0.7 percent to
    More than 2.5 billion shares changed hands on the main
board, up from 1.92 billion in the previous session.	
    Bridge makers surged after an expert panel set up by the
Tokyo Metropolitan Expressway Co Ltd, known as Shutoko, convened
its first meeting on Monday to discuss upgrading expressways in
Japan's capital.	
    Japan Bridge Corp jumped 22.1 percent, P.S.
Mitsubishi Construction Co Ltd surged by more than a
fifth and Miyaji Engineering Group Inc rose 24.8
    The Nikkei has risen 14 percent so far this year, boosted by
a run of U.S. economic data suggesting a robust recovery and
accommodative policies by global central banks that have pushed
investors back into risk assets.	
    Market participants said that domestic institutional
investors' selling had capped recent gains. 	
    "Domestic investors are selling and the foreign buying that
has so far pushed the market higher is taking a break," said
Kenichi Hirano, operating officer at Tachibana Securities.	
    "Excess liquidity in global markets continues to support
stocks, but it does look like the Nikkei will adjust a little
more in March, so this is the last chance to buy." 	
    In terms of valuations, the Topix index carried a 12-month
forward price-to-book ratio of 0.94, lower than 1.96 for the S&P
500 and 1.37 for the STOXX Europe 600, data from
Thomson Reuters Datastream showed.
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