Stocks snapped their four-session winning streak on the Tokyo Stock Exchange Monday, due chiefly to profit-taking following the recent surge amid a halt to the yen’s weakening, notably against the dollar.
The 225-issue Nikkei average lost 103.46 points, or 0.61 percent, to end at 16,911.32. On Friday, the key market gauge climbed 54.62 points.
The Topix index of all first-section issues lost 13.45 points, or 0.98 percent, to 1,361.90, after rising 6.30 points the previous trading day.
After opening moderately higher, the Nikkei average soon slipped below 17,000 and turned into negative territory, dragged down by selling to lock in profits after the index surged nearly 1,000 points in the four sessions through Friday, brokers said.
In early afternoon trading, the Nikkei average extended losses to 120 points, driven down by index futures-led selling.
The key market gauge showed some resilience in the middle of afternoon trading, but investors remained on the sidelines for the rest of the session in the absence of fresh incentives, brokers said.
“Investors felt a sense of achievement after the Nikkei retook 17,000 late last week,” said Chihiro Ota, general manager for investment research and investor services at SMBC Nikko Securities Inc. “Selling on a rally and profit-taking hit stock prices throughout the day.”
Falls in heavyweight components of the Nikkei average, such as mobile carriers SoftBank and KDDI, also weighed down the overall market, brokers said.
Still, analysts expect that the market would attract buybacks if there is an upturn in the external environment, including a rise in crude oil prices.
“I believe the Nikkei is expected to consolidate its downside at around 17,000 this week and next week,” Ota said.
Falling issues outnumbered rising ones 1,000 to 835 in the TSE’s first section, while 108 issues were unchanged.
Volume decreased to 2.22 billion shares from Friday’s 2.65 billion shares.
In the financial sector, mega-bank groups Mitsubishi UFJ and Sumitomo Mitsui, as well as insurers Tokio Marine and MS&AD Holdings, were downbeat.
The firmer yen battered automakers Toyota and Honda, along with machinery maker Hitachi and camera maker Canon.
On the other hand, Toshiba rocketed 7.02 percent due to receding concerns over a deterioration of its financial standing following a newspaper report Saturday that the company plans to pick the buyer of its medical equipment unit as early as this week.
Trading houses Mitsubishi and Mitsui were buoyant after crude oil futures prices in New York rose to the highest level in some two months on Friday.
In index futures trading on the Osaka Exchange, the key March contract on the Nikkei average dropped 50 points to end at 16,950.