Nikkei slips on coronavirus concerns, weak corporate earnings

  • Reuters
  • Stock Market News
Nikkei slips on coronavirus concerns, weak corporate earnings

* Concerns about virus outbreak keep sentiment cautious

* Earnings from Toray, Nikon disappoint

* Honda bucks trend with profit outlook upgrade

By Hideyuki Sano

TOKYO, Feb 10 (Reuters) - Japanese shares slipped on Monday as fears about the severity of the coronavirus outbreak in China and weak earning results outweighed any boost from strong U.S. employment data.

The Nikkei share average .N225 fell 0.6% to 23,685.98 points, slipping for two trading days in a row after hitting a two-week high on Thursday. The broader Topix .TOPX lost 0.72% to 1,719.64.

The death toll from the coronavirus rose over the weekend, passing the total killed by the SARS epidemic. In mainland China, the toll has topped 900 with total infections reaching 40,000.

"We can't see signs that the epidemic is easing as yet. The damage to supply chains is also not clear," said Nobuhiko Kuramochi, chief strategist at Mizuho Securities.

"We need to see whether the epidemic will peak out this month or it could take a bit longer."

Worries about the disease dampened any boost from strong U.S. jobs report on Friday. Non-farm payrolls increased 225,000 in January, far above expectations of 160,000. .ISHIP.T were the worst performing sector, falling 1.8%.

Earning results from some Japanese firms also highlighted tough business conditions.

Toray Industries 3402.T fell 2.3% after the manufacturer of fibres and plastics cut its annual profit outlook, citing softening demand of products for cars and smartphones.

Camera maker Nikon 7731.T dropped 5.8% to hit a decade low following its weak earnings due to shrinking demand for digital cameras.

Nippon Steel 5401.T fell 0.6% after the steelmaker booked a record loss of 440 billion yen ($4 billion) this financial year as it announced closing three blast furnaces to deal with waning domestic demand. the losses were bigger than expected, some market players saw the restructuring efforts as a long-term positive.

According to SMBC Nikko Securities, profits from Japanese firms that have reported quarterly earnings so far are down 3.8% from a year earlier, with manufacturers hit particularly hard.

Rakuten 4755.T dropped 1.5% as Japanese antitrust officials raided the offices of the e-commerce company after complaints from online merchants about the company's free shipping policies. Honda Motor 7267.T gained 2.9% after Japan's third-biggest carmaker raised its forecast for full-year operating profit by 6% on Friday due to a weaker yen. top executive said the company has not suffered from major supply chain disruptions in coronavirus-hit China.

Leopalace21 8848.T jumped 15% after the scandal-tainted apartment builder reported a recovery in occupancy.

Trading was subdued ahead of a Japanese market holiday on Tuesday.

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