Tech Shares Drag Nikkei Lower, Outweighing Boost from Toyota, Mitsubishi (Update 1)

Reuters

12:11 JST, February 7, 2024 (updated at 16:00 JST)

TOKYO, Feb 7 (Reuters) – Japan’s Nikkei share average fell on Wednesday, dragged by heavyweight technology stocks, but the losses were capped by sharp gains in Toyota Motor and Mitsubishi due to their robust outlooks and shareholder returns.

The Nikkei closed 0.11% lower at 36,119.92, recovering from a 0.84% slide earlier in the session.

“Investors were taking profits in outperformers and buying cheaper shares as seen in today’s chip-related stocks, which tracked losses in the U.S. chip shares index,” said Naoki Fujiwara, a senior fund manager at Shinkin Asset Management.

“But overall, the market sentiment was firm because there were more rising stocks than falling ones.”

All three major Wall Street indexes rose overnight but the tech-heavy Nasdaq inched up only 0.07%, with the Philadelphia SE Semiconductor index .SOX ending down 1.14%.

In Japan, air-conditioning maker Daikin Industries tanked 7.07%. Chip-making equipment maker Tokyo Electron lost 0.52% and chip-testing equipment maker Advantest declined 0.84%.

KDDI fell 1.96% after the mobile carrier announced a 500 billion yen ($3.38 billion) tender offer for convenience store chain Lawson jointly with Mitsubishi Corp. Shares of Lawson jumped 15.22%.

The broader Topix rose 0.42% to 2,549.95, lifted by Toyota and Mitsubishi Corp.

Mitsubishi surged 9.74% to an all-time high after the trading firm said it would spend as much as 500 billion yen to buy back up to 10% of its shares.

Peers Itochu and Mitsui & Co rose 3.31% and 1.81%, respectively, lifting the wholesales index 3.22%, the most among the Tokyo Stock Exchange’s (TSE) 33 industry sub-indexes.

Toyota Motor climbed 3.99% after the automaker raised its full-year operating profit forecast by nearly 9%.

Overall, auto and auto parts makers rose 2.92%.

Of the more than 1,600 shares on the TSE’s prime market, 52% rose, 44% fell and 2% were flat.

$1 = 147.9100 yen