Business / Financial Markets | TSE DATA & REPORT

Tokyo stocks turn lower as investors start to sell following recent rally

JIJI

Stocks turned lower on the Tokyo Stock Exchange Wednesday, as investors moved to sell in the wake of the recent rally.

The 225-issue Nikkei average fell 112.54 points, or 0.55 percent, to end at 20,442.75. On Tuesday, the key market gauge gained 195.59 points.

The Topix index of all first-section issues closed down 4.95 points, or 0.32 percent, at 1,537.77. It rose 12.99 points the previous day.

The Tokyo market made a firmer start tracking the strength of Wall Street on Tuesday.

British Parliament’s rejection on Tuesday of the Brexit deal between the government of Prime Minister Theresa May and the European Union had little effect on the market because it had been widely expected, brokers said.

But both Nikkei and Topix indexes quickly lost steam as selling took the upper hand following the two-session rally, they said.

“The Nikkei’s rebound above the psychologically important threshold of 20,500 prompted profit-taking,” said Yoshihiko Tabei, chief analyst at Naito Securities Co.

An asset management firm official pointed out that stocks encountered futures-linked selling to “correct” their recent rapid advance.

But the market’s downside was “solid,” Yutaka Miura, senior technical analyst at Mizuho Securities Co., said. “The Bank of Japan is believed to have bought exchange-traded funds.”

Falling issues outnumbered rising ones 1,424 to 635 in the TSE’s first section, while 69 issues were unchanged.

Volume dropped to 1.209 billion shares, from Tuesday’s 1.345 billion shares.

Kose plunged 3.53 percent because the cosmetics maker’s operating profit for April-December last year failed to beat a market consensus, brokers said. Investors also shunned peers Shiseido and Fancl.

Other major losers included optical-equipment-maker Olympus and clothing retailer Fast Retailing.

By contrast, movie distributor Toho drew popularity thanks to its announcement the previous day of a plan to buy back its own shares.

Also bought were retailer FamilyMart Uny and air-conditioner-maker Daikin.

In index futures trading on the Osaka Exchange, the key March contract on the Nikkei average was down 80 points at 20,430.