Nikkei flat in choppy trade as trade war woes pressures; Kikkoman soars

  • Reuters
  • Stock Market News
Nikkei flat in choppy trade as trade war woes pressures; Kikkoman soars
Credit: © Reuters.

* Markets braced for July trade talks between Japan and U.S.

* Machine tool, construction equipment makers tumble

* Shippers fall on lower metal prices

* Kikkoman soars on the back of falling soybean prices

By Ayai Tomisawa

TOKYO, June 20 (Reuters) - Japan's Nikkei share average was flat in choppy trade on Wednesday morning as firms that rely on China demand tumbled on trade war worries, with machine tool makers and shippers posting multi-month lows, which offset gains in defensive stocks.

The Nikkei .N225 was flat at 22,287.42 at the midday break after swinging between positive and negative territory, while the broader Topix .TOPX dropped 0.5 percent to 1,734.87.

Machine tool makers led the losses, with Okuma Corp 6103.T dropping 1.7 percent to a nine-month low of 5,630 yen, DMG Mori 6141.T stumbling as much as 4.0 percent to 1,540 yen, the lowest since February 2017.

Amada Holdings 6113.T skidded 2.4 percent to 1,042 yen, the lowest since September 2016 and Makino Milling Machine 6135.T dropped 2.5 percent to 833 yen, the lowest since last August.

Construction machinery makers Komatsu 6301.T shed 2.6 percent to a nine-month low, while Hitachi Construction Machinery 6305.T shed 2.5 percent to 3,470 yen, the lowest since mid-October.

As U.S. President Donald Trump threatened to impose a 10 percent tariff on another $200 billion of Chinese goods and Beijing warned it would retaliate, traders said that the sharp escalation in the trade dispute between the two countries has kept investors risk-averse. investors are very cautious against further downside risk," said Norihiro Fujito, a senior investment strategist at Mitsubishi UFJ Morgan Stanley (NYSE: MS ) Securities. "Investors are bracing for the planned talks between Japan and the U.S. next month, so they are refraining from taking positions."

Trump and Japanese Prime Minister Shinzo Abe earlier this month agreed to make preparations to hold trade meetings in July, which will be based around a new framework focusing on bilateral trade. stocks .ISHIP.T stumbled 2.7 percent and were the second worst sectoral performer after weaker metal prices stoked concerns for falling demand.

Mitsui OSK Lines 9104.T fell 3.8 percent, while Kawasaki Kisen 9107.T shed 2.1 percent.

Financial stocks were also hurt by the sour mood, with Mitsubishi UFJ Financial Group 8306.T falling 1.7 percent and Sumitomo Mitsui Financial Group 8316.T dropping 2.0 percent.

On the other hand, soy sauce maker Kikkoman soared 3.3 percent after soybeans came under pressure. food processors and beverage drink makers also bucked the weaker trend, with Ajinomoto 2802.T advancing 1.4 percent and Kirin Holdings 2503.T soaring 2.8 percent.

Drugmakers attracted buyers, with Daiichi Sankyo 4568.T rising 5.6 percent and Sumitomo Dainippon Pharma 4506.T gaining 2.4 percent. (Editing by Sam Holmes)

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