Nikkei drops as U.S.-China trade tensions flare; Sprint sale doubt hits Softbank

  • Reuters
  • Stock Market News
Nikkei drops as U.S.-China trade tensions flare;  Sprint sale doubt hits Softbank
Credit: © Reuters.

* Daiichi Sankyo turns positive on hopes for its OTC business sale

* SoftBank Group dives more than 5%

By Ayai Tomisawa

TOKYO, May 23 (Reuters) - Japan's Nikkei dropped on Thursday morning after renewed U.S.-China trade tensions dragged down technology shares, while index-heavyweight SoftBank Group fell more than 5 percent.

The Nikkei share average .N225 declined 0.9% to 21,101.14 in midmorning trade.

Tech shares were sold heavily after media reports on Wednesday said the United States was considering sanctions on video surveillance firm Hikvision. Corp 6762.T dived 6.4%, Advantest Corp 6857.T tumbled 4.1%, Tokyo Electron 8035.T shed 2.5%, and Sony Corp 6758.T slid 3.6%.

"Investors are worried that the U.S. may put restrictions on more companies in the future, not just Huawei and Hikvision," said Takuya Takahashi, a strategist at Daiwa Securities. "If that happens, the market will grow more concerned that growth in a new industry such as 5G will be hampered."

SoftBank Group 9984.T , which has a stake in Sprint Corp S.N , tanked 5.6%, removing 65 points from the Nikkei benchmark index after sources told Reuters that U.S. Justice Department's antitrust division staff have recommended the agency blocks T-Mobile US Inc's TMUS.O $26 billion acquisition of smaller rival Sprint. shares lost ground after oil prices extended falls from the previous day amid surging U.S. crude inventories. Inpex Corp 1605.T stumbled 4.3% and Japan Petroleum Exploration Co 1662.T dropped 1%.

Elsewhere, Daiichi Sankyo Co 4568.T , which was trading in negative territory in early trade, rose 0.6% after Nikkei Business reported that the drugmaker is in talks with several companies to sell its wholly owned over-the-counter (OTC) drug unit, with the final price likely to reach around 100 billion yen ($900 million). clothing chain Nishimatsuya Chain Co 7545.T surged 4.6% after its same-store sales in May rose 7.5% on the year thanks to strong sales in summer clothes as the weather was warm during Japan's Golden Week holidays.

The broader Topix .TOPX declined 0.6% to 1,536.57. Declining issues outnumbered advancing ones 1,296 to 764.

(Editing by Simon Cameron-Moore)

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