Nikkei down 123 points now in Japan as tech rally fails -->
Tokyo stocks ease by midday, techs party ending
Thursday August 2, 11:27 pm Eastern Time
(UPDATE: Adds byline, more shares)
By Risa Maeda
TOKYO, Aug 3 (Reuters) - Tokyo stocks ceded ground to profit-taking by midday on Friday after rising to three-week highs the day before, with high-tech stocks
failing to follow through from the Nasdaq's rise on upbeat comments by Intel Corp (NasdaqNM:INTC - news).
``I guess we were over-excited yesterday,'' said Kunihiro Hatae, general manager in Tokai Tokyo Securities'
equities trading division.
``Although the impact of Intel is huge on the whole high-tech sector, just one company becoming bullish will not
be enough for the sector to bottom out,'' he said.
The benchmark Nikkei share average was down 70.92 points or 0.57 percent at 12,328.28 at midday, hurt by
a 2.17 percent fall to 631 yen in Toshiba Corp , the world's second-biggest chip maker, after Intel.
Toshiba had surged 7.86 percent on Thursday, taking its rally into a three-day 14.16 percent rise.
The broader, capital-weighted TOPIX index (^TOPX - news) lost 7.48 points or 0.61 percent to 1,227.78.
Volume was steady with 305.77 million shares changing hands on the Tokyo Stock Exchange's first section, slightly less than Thursday morning's 324.41 million.
Decliners outnumbered gainers 821 to 483.
Technically, however, if the Nikkei stays above a 25-day moving average of around 12,200, that could provide a solid support, analysts said.
TECHS HALT RALLY
The Nikkei soared 3.68 percent on Thursday, the biggest percentage jump since April 18, led by steep gains in core tech issues after a report by Merrill Lynch on
Wednesday that said the worst may be over for global semiconductor firms.
The report was followed by comments by chip titan Intel's president, Craig Barret, that the world computer industry was over the worst in the current cycle.
High-tech bellwether Sony Corp eased 0.31 percent to 6,480 yen after rising 11.49 percent in the past three sessions.
Semiconductor equipment maker Tokyo Electron Ltd took a beating, falling 3.28 percent to 7,670 yen, after it said after the market closed on Thursday that it
posted a 3.5 billion yen ($28.29 million) net loss for the April-June quarter.
One of few to buck the downward trend was U.S.-Japanese anti-virus software firm Trend Micro Inc , which soared 9.06 percent to 3,010 yen, encouraged by a
``buy'' rating newly assigned by ING Barings.
The share rally comes ahead of the company's earnings announcement for the April-to-June quarter due at 0600 GMT.
BANKS OVERSHADOWED
Banking shares were mostly lower, with industry leader Mizuho Holdings sliding 3.98 percent to 506,000.
Some investors were locking in profits after the banking sector rallied earlier this week, and others were disappointed by the slow pace of plans to dispose of
problem loans and of cost-cutting measures unveiled on Thursday.
``The value of problem loans actually swelled by two trillion yen in the past year. That means it's too early to be bullish on the sector,'' said Katsuhiko Kodama,
head of the equities section at Toyo Securities.
Mizuho, the world's biggest bank by assets, said late on Thursday it would take 800 billion yen in loan-loss charges for the year to next March, up 60 percent from
its original estimate.
Despite similar moves by other major banks, the banking sector is still saddled with a mountain of bad loans and analysts warn of further problems ahead as the
economy flirts with its fourth recession in a decade.
Non-performing loans under industry disclosure standards at Japan's banks rose two trillion yen, or seven percent, from a year ago to 32.5 trillion yen at the end of
fiscal 2000/01, which ended on March 31, financial regulators said on Thursday.
Ashikaga Bank Ltd dived 8.33 percent to 165 yen as the regional bank was seen nearer to being nationalised.
Ashikaga Bank said on Thursday that it would fall deeply into the red this business year, and that it may not be able to pay dividends on preferre percent to 371,
hurt by news that five laid-off managers at its U.S. plant have filed suit charging the automaker discriminated against them because of their age and because they
were not Japanese.
Separately, visiting Australian Prime Minister John Howard urged Japan's fourth-biggest car maker on Friday not to close its loss-making plant in Adelaide, South
Australia. |
