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Nikkei edges down as chip shares slip, shippers rise

Published 10/20/2009, 09:15 PM
Updated 10/20/2009, 09:18 PM
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* Nikkei edges down after U.S. data prompted profit-taking

* JAL extends gains further

TOKYO, Oct 21 (Reuters) - Japan's Nikkei stock average edged down 0.3 percent on Wednesday after anaemic U.S. data prompted concerns about the pace of economic recovery and set off profit-taking on Wall Street, with chip-related shares down after recent gains.

But Kawasaki Kisen and other shippers powered higher after a key shipping index rose to a more than two-month high, while IHI Corp climbed on a media report of upbeat earnings as the start of Japan's results season nears. New construction of U.S. homes rose less than expected in September, and U.S. producer prices posted an unexpected decline, pointing to a weaker economic recovery.

But analysts warned about making too much of the data, noting that global markets have been ripe for profit-taking after recent gains that have taken them far from March lows. Even the Nikkei, a relative laggard, has risen some 47 percent.

"The data was really used as nothing more than an excuse for investors to lock in profits and it doesn't signal a change in trends for the markets," said Hideyuki Ishiguro, a supervisor in the investment advisory section of Okasan Securities. "The overall direction is still up, but markets are likely to take a bit of a breather ahead of the Chinese data tomorrow and the real start of the Japanese earnings season next week."

China's GDP figures for the third quarter are due on Thursday, with economists polled by Reuters expecting year-on-year growth of 8.9 percent.

The benchmark Nikkei slipped 16.13 points to 10,320.71 after hitting a three-week closing high on Tuesday, while the broader Topix fell 0.2 percent to 911.41.

Chip-related shares fell as investors looked to lock in profits after recent gains.

Chip tester maker Advantest Corp was down 2.9 percent to 2,375 yen and chip maker Tokyo Electron lost 1.6 percent to 5,680 yen. Nikon Corp, a key maker of steppers, lost 1.3 percent to 1,761 yen.

Shipping firms advanced after the Baltic Exchange's main sea freight index, which tracks rates to ship dry commodities, rose to over a two-month high on Tuesday helped by stronger demand for coal and iron ore cargoes.

Mitsui O.S.K. Lines rose 1.6 percent to 576 yen, Kawasaki Kisen Kaisha jumped 3 percent to 382 yen and Nippon Yusen KK added 1.1 percent to 364 yen.

The sea transport subindex climbed 1.7 percent to become one of the top percentage gainers among subindexes.

Struggling Japan Airlines Corp (JAL) extended gains by 5.9 percent to 125 yen, bringing its total gains this week close to 24 percent after falling by 26 percent the week before.

A government-appointed task force crafting a revival plan for JAL has sought 300 billion yen ($3.3 billion) in fresh capital for the struggling airline by tapping public and private funds, the Nikkei business daily said on Wednesday. IHI Corp jumped 4 percent to 182 yen after the Nikkei business daily said the heavy machinery maker is likely to report around 15 billion yen ($166 million) in operating profit for the April-September period.

That would top the company's previous projection by 3 billion yen, the Nikkei said, citing in part more high-margin projects. (Reporting by Elaine Lies; Editing by Joseph Radford)

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