Tokyo stocks edge down on profit-taking, selling on rally
Tokyo stocks fell victim to profit-taking and selling on a rally Wednesday in a market devoid of strong trading incentives.
The 225-issue Nikkei average of the Tokyo Stock Exchange inched down 9.24 points, or 0.03%, to close at 28,874.89, after rocketing 873.20 points Tuesday.
The Topix index of all first section issues ended 10.39 points, or 0.53%, lower at 1,949.14, following a gain of 60.08 points the day before.
The Tokyo market got off to a mixed start. The Nikkei rose on the strength of higher semiconductor-related stocks after the tech-heavy Nasdaq index rewrote its record high on Tuesday, while the Topix met with profit-taking after the previous day’s sharp rally took back more than it lost Monday.
Stocks weakened in the afternoon as investors sold on the rally, pulling down the Nikkei to around the previous day’s close.
The market then struggled for direction amid a dearth of new market-moving factors.
“The Nikkei was capped at around 29,000, as it has been for a while,” Maki Sawada, strategist at Nomura Securities Co., said. “Market players are waiting for trading incentives, such as the release of corporate earnings for the fiscal quarter though June and upward revisions to earnings forecasts, before aiming higher.”
Investors refrained from active trading as they waited for speeches by Federal Reserve officials later on Wednesday for clues to the U.S. central bank’s plans for tapering its monetary easing, said Masahiro Ichikawa, chief market strategist at Sumitomo Mitsui DS Asset Management.
Despite the selling pressure, stocks were underpinned by the previous day’s congressional testimony by Fed Chairman Jerome Powell, who suggested a cautious stance on interest rate hikes, calming investors’ nerves, brokers said.
In the TSE first section, losers outnumbered gainers 1,272 to 812 while 109 issues were unchanged. Volume sank to 944 million shares from Tuesday’s 1.173 billion shares.
Eisai slid 5.04% after a news report that the U.S. Food and Drug Administration was coming under fire for approving a remedy for Alzheimer’s disease developed by the Japanese drugmaker and U.S. biopharmaceutical company Biogen Inc. despite a lack of recommendation from an advisory panel.
Shipping names Mitsui O.S.K. Lines and Nippon Yusen fell back after surging the day before.
Automakers and other value stocks succumbed to selling as well.
On the other hand, chipmaking gear-maker Screen and test device manufacturer Advantest advanced 1.67% and 1.90%, respectively, as a decline in U.S. interest rates pushed up tech issues on Wall Street the day before.
Hitachi Construction Machinery closed 4.62% higher after parent Hitachi reportedly said that it plans to reach a conclusion on whether to sell off or absorb the machinery firm by the end of the current fiscal year.
In index futures trading on the Osaka Exchange, the key September contract on the Nikkei average rose 60 points to end at 28,810.
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