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Nikkei slips 0.3 pct as resource shares fall

Published 06/08/2009, 09:25 PM
Updated 06/08/2009, 09:40 PM
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* Resource-linked shares down as commodity prices fall

* Nikkei could be a little overbought for now -analysts

* But strong US data may push it over 10,000 this wk -analysts

TOKYO, June 9 (Reuters) - Japan's Nikkei stock average edged down 0.3 percent on Tuesday, with trading houses such as Mitsui & Co slipping amid falls in commodities prices and exporters dipping after a rally the day before. Digital camera maker Canon Inc shed 1.5 percent to 3,310 yen and industrial robot maker Fanuc Ltd edged down 0.3 percent to 8,070 yen.

But their losses were countered by gains in semiconductor-linked shares such as Tokyo Electron as investors snapped up bargains after the sector fell on Monday. Market analysts said that while any upturn in the Nikkei was likely to be limited today, the benchmark could well break above the psychologically key 10,000 threshold later this week.

"There's a sense in the market right now that the Nikkei may be a bit overheated, a bit overbought," said Noritsugu Hirakawa, a strategist at Okasan Securities.

"We have some key global economic indicators due out later this week, including U.S. retail sales, and if these confirm the growing impression that the global economy is improving, we're likely to see the Nikkei shoot up through 10,000."

Among other bright spots, the number of Japanese companies going bankrupt fell from the same month a year earlier in May for the first time in 12 months, a research firm said on Monday, in another sign that Japan's economic downturn may be bottoming out.

"This implies that the amount of bad loans held by banks may not grow any further and could help the banking sector gain this week, supporting the Nikkei," Hirakawa added.

The benchmark Nikkei shed 31.64 points to 9,833.99, a day after closing at an eight-month high, while the broader Topix was down 0.2 percent at 925.20.

Trading houses slipped after a broad decline in commodities prices on Monday, with Mitsui & Co down 1.2 percent to 1,289 yen, Mitsubishi Corp down 0.5 percent to 1,910 yen and Itochu Corp down 0.8 percent to 712 yen.

Smelters, which surged last week, slid as investors took profits. Dowa Holdings lost 4.5 percent to 428 yen and Mitsui Mining & Smelting shed 2.4 percent to 247 yen.

Some exporters gave up part of the gains they made on Monday, when they led a broad market rally.

But analysts said the longer-term picture for the sector was strong as the dollar has risen back above 98 yen, higher than the 95 yen level many exporters assume when forecasting their earnings.

Tokyo Electron climbed 3 percent to 4,850 yen and Advantest Corp rose 1.3 percent to 1,887 yen. (Reporting by Elaine Lies; Editing by Hugh Lawson)

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