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Nikkei dips after 9 days of gains, banks up

Published 07/27/2009, 09:13 PM
Updated 07/27/2009, 09:16 PM
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* Nikkei eases on concerns about overheating

* Advantest, high-tech shares take a breather after rally

* Banking shares gain, seen as laggards

TOKYO, July 28 (Reuters) - Japan's Nikkei average inched down 0.3 percent on Tuesday, after a nine-day gaining streak, as stocks that had led the strong run-up such as Advantest Corp took a breather amid concern about the rapid pace of the rally.

But investors picked up banking shares that many see as having lagged the market advance, with top bank Mitsubishi UFJ Financial Group rising.

Market players said profit-taking appeared likely after the benchmark Nikkei rose on Monday for a ninth straight day, its longest run of gains since 1988 in which it has climbed 11.5 percent.

"High-tech shares that had already rallied are pausing for now, and clues to further gains in the overall market will depend on the degree to which investors snap up laggard banking shares," said Takahiko Murai, general manager of equities at Nozomi Securities.

"If banks go up much higher we can expect another round of gains for the (broad-based) Topix index. As for tech stocks, however, the sustainability of their earnings prospects is questionable as demand has improved but not enough to let them return to the black."

The benchmark Nikkei fell 26.95 points to 10,061.71. It rose 1.5 percent the previous day to post its highest close since June 12.

The broader Topix was flat at 927.57.

The Standard & Poor's 500 Index gained 0.3 percent on Monday after data showing U.S. new home sales had their biggest monthly gain in eight years in June, suggesting the housing market may be starting to recover from its worst slump since the Great Depression of the 1930s.

Shares of chip-tester maker Advantest shed 2.7 percent to 1,907 yen and electronics components maker TDK Corp slipped 1.6 percent to 4,950 yen.

Banking shares gained. Mitsubishi UFJ added 1.5 percent to 561 yen, while No.2 Mizuho Financial Group climbed 1.9 percent to 215 yen. Sumitomo Mitsui Financial Group, the third-largest bank, advanced 2.9 percent to 3,950 yen.

Stocks of companies with solid earnings continued to attract demand.

Sapporo Holdings surged 9.1 percent to 621 yen after the beer maker raised its group operating forecast to a 1.3 billion yen ($13.66 million) profit for the six months ended in June, a sharp reversal from its previous estimate of a 2 billion yen loss, due to cost-cutting. ($1=95.17 Yen) (Reporting by Aiko Hayashi; Editing by Michael Watson)

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