Friday, March 10, 2000
End Up But Early Gains Trimmed; High-Techs Fall
TOKYO (Dow Jones)--Japan's benchmark Nikkei stock average finished only slightly higher Friday as select high-technology and Internet-related shares plummeted and as players took profits on the morning session's gains.
The broader market, however, was generally strong, led by gains in such domestic demand sectors as steel, paper and pulp, textiles and retail.
The Nikkei Stock Average of 225 selected issues closed up 88.07 points Friday at 19750.40 after a 101.47-point fall Thursday. In the first hour of trade, the index rose as high as 19982.44.
The key cash index ended the latest fiscal year at 15836.59 on March 31, 1999 and finished the 1999 trading year at 18934.34.
The near-term June Nikkei futures contract ended up 210 points at 19840 on the Osaka Securities Exchange.
"The market peaked early in the morning and then slipped on profit-taking as high-techs felt top-heavy," said Kazunori Shimono, manager at the equities trading section of Tokyo-Mitsubishi Personal Securities.
Early in the morning session, shares gained on the back of a strong showing by U.S. equities overnight and expectations the settlement of the March Nikkei 225 futures contract resulted in slight net buying of cash stocks. Players had been expecting net selling.
The settlement price of the contract was fixed at 20129.21, up 466.88 points from Thursday's close of the cash Nikkei stock average.
High-technology shares suffered particularly badly in the afternoon session, however, as players took profits. Key issues like Sony, NTT Mobile Communications Network and Hikari Tsushin, however, were driven lower by reasons particular to the companies.
Bellwether Sony plummeted 1,800 yen, or 6.4%, to 26,300 yen after rumors that it has started to recall its recently launched PlayStation2 game console. Sony Computer Entertainment denied the rumor.
NTT Mobile Communications Network, meanwhile, slipped by another 200,000 yen, or 4.9%, to 3.88 million yen a day after ruling party leaders said Nippon Telegraph & Telephone should reduce its stake in the mobile phone operator to less than 50% from the current 67%.
Investors reacted to the possibility that the sale by NTT may lead to a glut of NTT DoCoMo shares on the market, traders said.
Hikari Tsushin plunged further after Thursday's huge losses, falling 31,000 yen, or 24.8%, to end at 94,000 yen, its lowest level since Nov. 4.
The issue was beset for a second day by rumors, denied by Hikari Tsushin, that the company's president had been arrested. The shares were also damaged by an article in a Japanese monthly magazine issued Friday stating that the president used pressure tactics to increase sales.
Hikari Tsushin has lost 47% of its value since March 3.
"The magazine article is not the entire reason behind Hikari Tsushin's plunge, though it is part of it," said Kunihiro Hatae, general manager of the equity department at Tokyo Securities. Hatae emphasized the losses were also part of a larger corrective phase experienced by high-flying Tokyo issues in general.
Softbank, the standard bearer for Internet issues, also added on to Thursday's huge losses by falling 14,800 yen to end at 99,200 yen. Softbank has fallen 29% since March 3.
In the broader market, however, advancers far outnumbered losers. On the Tokyo Stock Exchange's First Section, 876 issues rose, with 435 issues edging lower and 89 closing unchanged from Thursday.
The Topix index of all TSE First Section issues fell 10.47 points to 1633.30, reflecting the high-technology losses.
Volume on the First Section of the Tokyo Stock Exchange is estimated at 1.497 billion shares, more than double Thursday's volume of 713.86 million shares due to the settlement of the futures contract.
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