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Nikkei falls back below 20,000 on profit-taking


The benchmark Nikkei average slipped below 20,000 on the Tokyo Stock Exchange Wednesday, hit by profit-taking the day after it closed above the psychologically important line for the first time in more than three months.

The 225-issue Nikkei average lost 74.27 points, or 0.37 percent, to finish at 19,938.13. On Tuesday, the key market gauge climbed 264.93 points.

On the other hand, the Topix index of all first-section issues gained 0.31 point, or 0.02 percent, to 1,602.26, after rising 21.70 points the previous day.

Selling to lock in gains outpaced buying from the outset of Wednesday’s trading, as a sense of achievement spread in the market after the Nikkei average topped the 20,000 line, brokers said.

In addition, investor sentiment was dampened as sales at major Japanese department stores in November, announced Tuesday, turned out to be sluggish and the U.S. Institute for Supply Management reported the same day a weaker-than-expected manufacturing business index for November, according to brokers.

But the market’s downside was limited thanks to buying on dips on the back of growing hopes for additional monetary easing steps by the European Central Bank at its policy-setting meeting on Thursday.

“Tokyo stocks were caught in a tug of war between profit-taking and purchases on dips backed by expectations for further rises in stock prices,” with the Nikkei average moving in a narrow range throughout Wednesday, an official of a bank-affiliated securities firm said.

Analysts said the ECB is highly likely to extend monetary easing measures and carry out an interest rate cut.

“If the ECB decides on additional monetary easing, European stocks are expected to gain ground, giving a straightforward boost to Tokyo stocks,” said Kenichi Hirano, market analyst at K Asset Co.

Hirano also said that additional monetary easing by the ECB could help Tokyo stocks to mark this year’s highs.

“Even if such a decision is not made, losses in the Tokyo market are likely to be limited, as there are still many investors waiting for buying opportunities,” Hirano added.

Falling issues slightly outnumbered rising ones 885 to 873 in the TSE’s first section, while 163 issues were unchanged.

Volume fell to 1.90 billion shares from Tuesday’s 2.05 billion shares.

Department store chain operators, such as Isetan Mitsukoshi, Takashimaya and J. Front Retailing lost ground, after they reported Tuesday sluggish sales of winter clothes.

Clothing store chain operator Fast Retailing also met with selling on concerns that sales at its Uniqlo stores may be weak as well.

Electronic parts producers Minebea, Murata Manufacturing and Alps Electric were also downbeat after a major securities firm revised down its estimates on orders for electronic parts used in iPhones, brokers said.

Other major losers included automakers Honda and Fuji Heavy, electronics manufacturer Sony, and drug makers Takeda and Shionogi.

By contrast, auto giant Toyota, industrial robot producer Fanuc, megabanks Mitsubishi UFJ and Sumitomo Mitsui, and mobile phone carriers SoftBank Group and KDDI attracted buying.

In index futures trading on the Osaka Exchange, the key December contract on the Nikkei average lost 70 points to close at 19,950.