News Column

Tokyo stocks drop following recent gains

July 3, 2014

Satoshi Iizuka

Tokyo stocks dropped Thursday on selling to lock in profits following recent gains.

The 225-issue Nikkei Stock Average ended down 21.68 points, or 0.14 percent, from Wednesday at 15,348.29. The broader Topix index of all First Section issues on the Tokyo Stock Exchange finished 2.19 points, or 0.17 percent, lower at 1,278.59.

The market opened higher, underpinned by buying after the Dow Jones Industrial Average and the S&P 500 index both closed at record highs for a second straight day overnight.

After initial buying ran its course, the key indexes lost upward momentum and selling increasingly took the upper hand as market participants took profits on gains earlier in the week and receded to the sidelines ahead of the release of U.S. payroll data for June later in the day, said Tsutomu Yamada, market analyst at Securities Co.

"It it natural for a correction to take place given the upbeat tone of the Tokyo market this week," said Takuya Takahashi, senior strategist at Daiwa Securities Co.

Decliners outnumbered advancers 954 to 705 on the First Section, while 155 finished unchanged.

Oil and coal products became the worst performing sector. JX Holdings declined 18 yen, or 3.2 percent, to 537 yen and Cosmo Oil lost 6 yen, or 2.8 percent, to 212 yen.

Other major decliners included insurance, rubber products and brokerage shares.

Dai-ichi Life Insurance fell 35 yen, or 2.3 percent, to 1,502 yen after the Nikkei business daily reported that the company plans to raise about 250 billion yen through a public offering of new shares for the purpose of purchasing mid-ranking U.S. life insurer Protective Life Corp., raising concern over share dilution.

United Arrows tumbled 145 yen, or 3.6 percent, to 3,860 yen a day after the casual clothing shop operator said its sales on a same-store basis declined 3.4 percent year on year in June.

Bucking the trend, Toshiba rose 12 yen, or 2.5 percent, to 484 yen on reports that Westinghouse Electric, the U.S.-based subsidiary of the Japanese electrical machinery maker, is expected to clinch a deal in the coming days to construct a nuclear reactor for a state-run utility in Bulgaria.

Volume on the main section totaled 1,931.95 million shares, down from Wednesday's 2,293.86 million shares.

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Source: Japan Economic Newswire

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