Profit-taking depresses Tokyo stocks despite Wall Street gains

Published January 24th, 2001 - 02:00 GMT

Tokyo share prices edged down 0.7 percent Wednesday, January 24, as investors continued to cash in their gains, snubbing a sharp rally by technology counters in New York, brokers said. The Tokyo Stock Exchange's Nikkei-225 index closed down 91.08 points at 13,893.58, its second straight daily loss following a seven-session winning streak. 

 

"Share prices here rose at one point in early trading, heartened by gains in New York. But they fell back later due to profit-taking," said Nikko Securities product manager Hiroichi Nishi. 

 

Wall Street's Dow Jones industrials rose 71.57 points or 0.7 percent to close Tuesday at 10,649.81, while the technology-laden Nasdaq jumped 82.48 points or 3.0 percent to 2,840.39.  

 

Many investors retreated to the sidelines to see what measures will emerge from deliberations in Japan's ruling Liberal Democratic Party on ways to boost the weak stock market, Nishi added. "The market still lacked energy, taking a breather in the absence of further trading leads," he said. 

 

Tokai-Tokyo Securities trading manager Kunihiro Hatae said the Nasdaq's new-found stability made it difficult for investors to sell. "But they also feel reluctant to buy until they see the stock market support measures." 

 

The Topix index of all issues on the Tokyo market's first section dropped 4.02 points to 1,304.07. Turnover on the major board totaled an estimated 611 million shares, against the previous day's 603.2 million. ”Investors took profits and funds focused on Internet-related issues," said Cosmo Securities product manager Hiroshi Sato. 

 

Fresh political uncertainty might discourage foreign investors after Tuesday's resignation of Japan's state economic minister, Fukushiro Nukaga, over an influence-peddling scandal, brokers said. Nukaga was the third cabinet member to resign under Prime Minister Yoshiro Mori, who assumed his position only in April. "The resignation could delay parliamentary discussion on next fiscal year's budget," Nissan Securities equities chief Masaru Kazama said. 

 

"The possible delay in the budget talks may encourage foreign investors to dump Japanese shares," the trader warned, with opposition parties scenting blood and seeking to attack Mori when the Diet convenes on January 31. 

 

Declining issues outnumbered gainers by 729 to 515, while 179 other issues were unchanged. Hi-tech and telecoms issues were generally lower with a recovery by the Japanese yen against the dollar depressing export-oriented companies. 

 

Electronics giant Sony Corp. fell 170 yen to 8,580, and NEC Corp. slipped 30 to 2,400. Mobile phone firm NTT DoCoMo Inc. dropped 60,000 yen to 2.3 million. But Sega Corp. surged 200 yen or 15.8 percent to 1,470 after reports said the company would halt production of its poor-selling Dreamcast games console and start supplying software to its chief rivals, Sony and Nintendo Co. 

 

"The market is welcoming the reports that Sega is restructuring and cutting its loss-making operation," Nikko Securities senior analyst Kazue Mayuzumi said. 

 

Internet investor Softbank Corp. also soared on a press report that said its financial arm was to set up a joint life insurance firm. Softbank closed up 840 yen or 16.1 percent at 6,050.—(AFP)  

 

© Agence France Presse 2000  

© 2001 Mena Report (www.menareport.com)

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