Nikkei falls on caution over U.S.-China trade talks, earnings misses

  • Reuters
  • Stock Market News
Nikkei falls on caution over U.S.-China trade talks, earnings misses
Credit: © Reuters.

* Markets await Fed policy decision, eye trade developments

* Investors digest mixed earnings: Nintendo falls, Sony gains

* More earnings results coming up; Murata on Wed, Toyota on Fri

By Tomo Uetake

TOKYO, July 31 (Reuters) - Japanese shares slid on Wednesday, hurt by U.S. President Donald Trump's warning to China not to drag out trade talks while some disappointing earnings hit automotive parts suppliers and banks.

The Nikkei share average .N225 fell 0.86% to 21,521.53 as investors cautiously awaited the U.S. Federal Reserve's policy decision later in the day.

For the month of July, the benchmark eked out a 1.2% gain.

As a new round of U.S.-China trade negotiations started in Shanghai, Trump warned China against waiting out his current presidential term before finalising a trade deal. Japan's earnings season in full swing, reactions to individual earnings results dominated trading.

Sony Corp 6758.T soared 5.3% after the company surprised the market on Tuesday by reporting a record first-quarter operating profit despite the slowing gaming business, as strong demand for multiple-lens camera systems for smartphones boosted sales of image sensors. Corp 6902.T shed 3.4% after the auto-parts maker reported during the session that the company's operating profit for the April-June quarter fell 23.9%, although analysts forecasted a 20.2% rise. car parts supplier Aishin Seiki Co 7259.T dipped 2.6% after the company cut its profit forecast for the year through March. Co 7974.T fell 1.2% after the game maker reported its operating profit fell 10% in the three months to June, below market expectations, despite stronger sales of its Switch console. Minolta Inc 4902.T tumbled 11.4% after the manufacturer of copy machines and other products posted an unexpected net loss in the three months to June. Mitsui Trust Holdings 8309.T dropped 3.7% and Sumitomo Mitsui Financial Group 8316.T retreated 1.0% as both financial groups reported falls in first-quarter profits. shares .IBNKS.T fell 1.2% as the sector struggles with low interest rates and weak fund demand, with top regional banking group Concordia Financial Group 7186.T slipping 1.3% and Shizuoka Bank 8355.T dipping 1.2%.

Analysts say Bank of Japan governor Haruhiko Kuroda's comments on Tuesday that he is ready to deploy further stimulus if necessary weighed on regional banks. outnumbered advancers but there were some bright spots in earnings.

Anritsu Corp 6754.T climbed 4.1% after the leading 5G testing systems provider reported better-than-expected 65.3% growth in operating profits. Inc 3092.T jumped 11.0% after the online fashion retailer posted stronger-than-expected quarterly profits. companies including Panasonic Corp 6752.T , Murata Manufacturing Co 6981.T , Takeda Pharmaceutical Co 4502.T and Japan Tobacco Inc 2914.T are due to announce earnings after the market close on Wednesday.

The broader Topix .TOPX lost 0.66% to 1,565.14. Turnover on the Tokyo Stock Exchange's main board rose to 2.67 trillion yen, its highest in 5-1/2 weeks, due in part to rebalancing of investor portfolios as the Nikkei's components are reshuffled.

Bandai Namco Holdings 7832.T will join the Nikkei average, replacing Chiyoda Corp 6366.T on Thursday.

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