Nikkei close to breaking 12000 level. Sun July 8, 10:22 pm ET -->
Tokyo stocks slip by midday on earnings woes
(UPDATE: Updates to midday)
TOKYO, July 9 (Reuters) - Tokyo's Nikkei average slipped nearly two percent by midday on Monday, with investors punishing the tech sector amid concerns the
global economic slowdown will stifle their chances for a rapid recovery.
``The macroeconomic picture is not pretty and all signs are that it will be even worse a month from now,'' said
Hiroaki Muto, general manager of investment trust fund management at Nissay Asset Management.
``Many of the major tech stocks are at very attractive levels, but we still have no evidence of a bottom for
earnings, and global conditions have that hope thin.''
The Nikkei shed 1.79 percent or 220.00 points to 12,086.08, a stone's throw away from breaking the
psychologically key 12,000 level for the first time since mid-March.
The capital-weighted TOPIX index (^TOPX - news) lopped off 1.87 percent or 23.44 points to 1,230.12.
Reflecting jitters over a recent onslaught of profit warnings from major U.S. and European technology firms, as
well as an inkling that many of Japan's electronics companies will soon make similar confessions of their own,
bellwether Sony Corp extended losses into a sixth straight session to drag on both major indices.
Tech shares also came under pressure after the U.S. Nasdaq index (^IXIC - news) lost 3.65 percent on Friday, while chip shares were hit by a more than eight
percent plunge for the Philadelphia semiconductor index (^SOXX - news).
Major PC and chipmaker Fujitsu Ltd was down 4.45 percent at 1,139 yen, while industry rival NEC Corp chopped off 4.16 percent to 1,522 yen after touching a
year-to-date low of 1,509.
Japan's number one chip producer, Toshiba Corp , dropped 5.07 percent to 580.
Computer anti-virus software maker Trend Micro Inc tumbled by its daily limit of 500 yen or 15.11 percent to 2,810, topping the list of percentage losers on the
first section after last Friday's announcement of a bearish revenue outlook.
Traders drew little optimism from Japanese Finance Minister Masajuro Shiokawa's pledge at a weekend meeting of Group of Seven finance ministers to keep
Japan's economy from contracting. They said focus would remain instead on the lack of policy options available to the administration.
Amid the tech downdraft, money found its way into defensive shares such as Tokyo Gas Co Ltd, which was up 1.75 percent at 407 yen and the first section's most
heavily traded issue.
On the brighter side of the market, Arabian Oil Co Ltd (AOC) tacked on 5.14 percent to 1,207 yen after Kuwait said on Saturday it agreed with Japan on the
need for a new contract basis for Tokyo to keep its upstream oil interest in Kuwait's portion of the Neutral Zone, alleviating fears AOC may lose its presence in the
area altogether. |
