Join +750K new investors every month who copy stock picks from billionaire's portfoliosSign Up Free

Nikkei snaps 3-day winning streak as fresh trade worries weigh

Published 06/12/2019, 02:33 PM
Updated 06/12/2019, 02:40 PM
Nikkei snaps 3-day winning streak as fresh trade worries weigh
JP225
-
RENA
-
TMUS
-
TOPX
-
7201
-
9984
-
IELEC.T
-

* Earning outlook continues to deteriorate
* SoftBank Group falls as T-Mobile/Sprint deal faces more
hurdle
* Nissan down, proxy advisor calls for oust of CEO

By Hideyuki Sano
TOKYO, June 12 (Reuters) - Japan's Nikkei share average
.N225 fell on Wednesday, snapping a three-day winning streak,
as the tough stance taken by U.S. President Donald Trump in his
latest comments on trade negotiations with China fed worries of
a global slowdown.
The Nikkei .N225 fell 0.4% to 21,129.72, with an immediate
resistance seen at its current 100-day moving average at 21,272.
The broader Topix .TOPX shed 0.5% to 1,554.22. Declining
shares outnumbered advancing ones 1,329 to 717.
The market's recovery over the past several sessions from
multi-month lows touched earlier in June is beginning to fade,
largely due to concerns over the impact of a protracted
U.S.-China trade war.
Trump said on Tuesday that he was holding up a trade deal
with China and had no interest in moving ahead unless Beijing
agrees again to four or five "major points", without specifying
what those issues were. "If you list up negative factors, there are so many,
starting from U.S-China frictions and Brexit. When you try to
list up positive factors, they are few and far between," said
Seiki Orimi, senior investment strategist at Mitsubishi UFJ
Morgan Stanley Securities.
Indeed, Japanese companies' earnings outlook continued to
deteriorate. The forward earnings per share of Topix has dropped
6.7% from its peak late last year and is now down 2.1% from a
year ago.
In a rare bright spot, Japan's machinery orders, a key
leading gauge of capital spending, unexpectedly rose for a third
straight month in April, helped by the strength in domestic
demand. Yet that meant little in light of the overwhelming
uncertainties Sino-U.S. frictions are posing to companies'
long-term investment plans, particularly in the technology
sector.
"Even if we have some good numbers, people won't take them
at face value given what's going on between the U.S. and China,"
said Hiroshi Watanabe, economist at Sony Financial Holdings.
"Cyclically speaking, it is about the time the global
semi-conductor cycle could bottom out. But trade in tech
products is unlikely to recover given disruptions to supply
chains, further delaying any potential bottom," he said.
Electric machinery company shares .IELEC.T were down 0.7%,
underperforming the market.
SoftBank Group 9984.T fell 2.4% after 10 U.S. states led
by New York and California filed a lawsuit to stop T-Mobile US
Inc's TMUS.O $26 billion purchase of Sprint Corp S.N , a
subsidiary of SoftBank Group. Nissan Motor 7201.T fell 0.6% as its governance crisis
appeared to deepen. Leading proxy advisory firm ISS has urged
Nissan shareholders to vote against the reappointment of Chief
Executive Officer Hiroto Saikawa amid a widening rift with its
alliance partner Renault RENA.PA over governance reform.
(Editing by Simon Cameron-Moore)

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.