Thursday May 8, 04:22 AM
Tokyo shares end morning lower as oil price dents Wall Street - UPDATE
TOKYO (Thomson Financial) - Japanese shares ended Thursday morning lower as investors locked in recent gains following the overnight selloff of U.S. stocks on surging oil prices.
Stocks opened lower following a downturn on Wall Street as record oil prices raised worries about consumer spending and the U.S. economy. Overnight, the Dow industrials shed 206.48 points or 1.6 percent to 12,814.35.
Investors moved to lock in profits from recently bought financial and property stocks, sending the benchmark Nikkei (news) down 140 points at one stage.
Trading was thin as some investors retreated to the sidelines ahead of tomorrow's special quotation (SQ) for the settlement of futures and options contracts. The ongoing local reporting season also made some investors cautious.
'But I think this was a good pause for price adjustments after recent sharp gains. The market showed firm downside support as the Nikkei fell by a smaller margin compared to the Dow,' said Fumiyuki Nakanishi, chief strategist at SMBC Friend Securities.
'If the market can pass SQ settlements without much incident, stocks are expected to be firmer next week, with a near-term target of 14,500 points for the Nikkei,' Nakanishi said.
The Nikkei 225 Stock Average ended the session down 123.54 points or 0.9 percent at 13,978.94, off a low of 13,960.46.
The broader Topix declined 15.56 points or 1.1 percent to 1,377.72.
Gainers outpaced decliners 804 to 755, with 156 issues unchanged
Volume fell to 863 million shares from 966 million shares on Wednesday morning.
The selling was broad-based, with financial issues among the big decliners after their U.S. peers tumbled overnight.
Mizuho Financial Group declined 3.8 percent to 533,000 yen, Mitsubishi UFJ Financial (Berlin: MFZ.BE - news) slipped 3.6 percent to 1,118 yen and Sumitomo Mitsui Financial Group was down 3 percent at 875,000 yen.
General leasing firm Orix (Frankfurt: 851769 - news) fell 6.4 percent to 18,270 yen. Top brokerage Nomura Holdings (N33.SI - news) shed 3 percent to 1,824 yen.
Property counters fell across the board. Sumitomo Realty and Development lost 4.5 percent to 2,670 yen, Mitsui Fudosan was down 3.3 percent at 2,675 yen and Mitsubishi Estate was down 4.2 percent at 2,875 yen.
Consumer electronics giant Sony (Munich: 853687 - news) shed 2.6 percent to 4,820 yen while major office equipment maker Canon (Berlin: CNN1.BE - news) declined 0.9 percent to 5,420 yen.
Shares of Honda Motor (Paris: JP3854600008 - news) declined 3.2 percent to 3,330 yen after the Nikkei newspaper reported that the automaker will increase the number of its dealerships in China to 700 by the end of this year and boost annual production capacity there by 20 percent.
Sumitomo Chemical gained 0.6 percent to 690 yen on a report that the chemical producer will boost production of resorcin by 50 percent to 30,000 tons per year by 2010 to capture the number one position on the global adhesive market. Resorcin is a petrochemical that is primarily used as an adhesive in tire manufacturing.
($1 = 104.75 yen)
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