Nikkei drops for 4th session on Wall Street’s fall

December 15, 2017

Tokyo- The benchmark Nikkei average extended its losing streak to a fourth session on the Tokyo Stock Exchange Friday, weighted down by an overnight fall in US equities.

The 225-issue Nikkei average fell 141.23 points, or 0.62 percent, to end at 22,553.22. On Thursday, the key market gauge lost 63.62 points.

The TOPIX index of all first-section issues finished down 14.67 points, or 0.81 percent, at 1,793.47, after shedding 2.70 points the previous day.

Tokyo stocks opened weaker following Thursday's retreat on Wall Street, where the Dow Jones industrial average snapped a four-session record-breaking advance, battered by rekindled concerns over the early enactment of a US tax reform bill.

The Tokyo market was also hit by heavy selling of Japan's three major mobile phone carriers after cybermall operator Rakuten announced the previous day that it plans to become the fourth player in the mobile phone market with its own communications infrastructure. The Nikkei briefly slumped over 210 points in the morning.

In the afternoon, the key market gauge cut the losses and rebounded at one point into plus territory, thanks to buybacks and purchases on declines, brokers said.

Toward the close, however, stocks met with position-adjustment selling ahead of the weekend, brokers said.

The mobile phone carriers met with selling as investors assumed that Rakuten's market entry "would intensify competition," said Chihiro Ota, general manager for investment research and investor services at SMBC Nikko Securities Inc.

Falls in Softbank Group and KDDI, both heavyweight components of the Nikkei average, pushed down the overall market, Ota also said, while noting that futures-led purchases in the afternoon helped stocks rebound temporarily.

Masahiro Ichikawa, senior strategist at Sumitomo Mitsui Asset Management Co., said that buybacks were inspired by the Nikkei's fall below 22,500 in the morning.

"Nonresidents who have recently been net sellers of (Japanese) stocks might have bought mainstay issues in the afternoon session," Ichikawa also said.

But the market failed to maintain the upward momentum as some players moved to cash in gains prior to the weekend, he added.

Falling issues overwhelmed rising ones 1,343 to 629 in the TSE's first section, while 81 issues were unchanged.

Trading volume grew to 1,844 million shares from Thursday's 1,666 million shares.

Softbank Group and KDDI lost 2.39 pct and 6.65 pct, respectively. Rakuten fell 5.49 percent due to investor concerns over the profitability of its planned mobile phone business, brokers said.

Megabank groups Sumitomo Mitsui, Mitsubishi UFJ and Mizuho lost further ground on receding expectations for early U.S. tax reform, brokers said.

By contrast, industrial materials maker Showa Denko and casual clothing store operator Fast Retailing attracted purchases.

In index futures trading on the Osaka Exchange, the key March contract on the Nikkei average fell 110 points to 22,520. Jiji Press