Nikkei snaps 4 days of losses but mood stays fragile; energy firms weak

  • Reuters
  • Stock Market News
Nikkei snaps 4 days of losses but mood stays fragile; energy firms weak
Credit: © Reuters.

* Nikkei takes a breather after sell-off, but Topix eases

* Chip sector gains; energy, resources & bank shares sag

* Japan Post, SMC, Bridgestone to report earnings on Friday

By Tomo Uetake

TOKYO, Aug 8 (Reuters) - Japan's Nikkei eked out small gains on Thursday on bargain-hunting after the past week's heavy selling, but sentiment remained frail over uncertain prospects for a resolution to the U.S.-China trade conflict.

The benchmark Nikkei share average .N225 rose 0.37% to 20,593.35 after four straight days of losses, while the broader Topix .TOPX retreated 0.08% to 1,498.66.

Turnover on the Tokyo Stock Exchange's main board was subdued at 2.09 trillion yen ($19.7 billion) versus the daily average of 2.34 trillion yen over the past year.

The market was relieved as the Chinese yuan CNY=CFXS was largely stabilising after heavy falls early this week and as there was no fresh escalation in Sino-U.S. tensions over the last 24 hours. data showed Chinese exports rose 3.3% in July from a year earlier, when analysts had expected a fall of 2%. Imports also declined by less than expected, suggesting some resilience to the drawn-out Sino-U.S. tariff struggle. market calmed down a bit as there was no particular bad news," said Soichiro Monji, senior economist at Sumitomo Mitsui DS Asset Management.

Growth-value shares extended their outperformance since mid-July, with the Topix Growth index .TOPXG rising 0.1% while value shares .TOPXV dipped 0.3%.

Growth-value plays such as chip sector stocks Advantest 6857.T and Tokyo Electron 8035.T climbed 3.1% and 1.1%, respectively, while typical value plays such as banks .IBNKS.T shed 0.6%.

Yet worries that the confrontation between the world's two largest economies could tip the global economy into a severe downturn or even a recession kept many investors on the sidelines, with energy and resource-related shares lagging.

The oil and coals products sector .IPETE.T dipped 4.5% to become the worst performer of Tokyo's 33 sub-indexes, while the mining sector .IMING.T was the second worst, down 2.3%.

"I see this as a temporary relief rally, which will likely be short-lived," said Masanari Takada, cross-assets strategist at Nomura Securities.

"Foreign investors' appetite for Japanese equities is not strong as they are moving away from value stocks."

Trading mostly focused on companies that just published earnings.

Index heavyweight SoftBank Group 9984.T fell 2.7%. The firm raked in a record quarterly net profit for a Japanese firm, but the total was boosted by gains from sales of a part of its stake in Alibaba BABA.K .

SoftBank's results have been increasingly volatile as Chief Executive Masayoshi Son shifts focus from the predictable income of telecoms in favour of bets on startups with shifting valuations. 4686.T hit limit-high, soaring 19.6% after the software developer reported strong profit growth in April-June. of some other technology firms reporting bumper earnings also jumped, with Lasertec 6920.T surging 14.0% and Optorun 6235.T 14.6%.

Sumitomo Osaka Cement 5232.T advanced 8.6% after its earnings beat market expectations. not all the earnings reports were rosy.

Heavy equipment maker IHI 7013.T tumbled 13.6% after posting weak quarterly results. Resource conglomerate JXTG 5020.T , hurt by weak oil prices, fell 6.0%. Holdings 5020.T shed 5.5% to hit its lowest since November 2016, following the oil and metals company's quarterly profit plummeting 88% on lower petrochemical margins in April-June. Corp 1963.T slid 6.5% after the engineering company reported a 21% drop in its April-June net profit during the Tokyo exchange's midday break. ahead, about 630 companies, including Japan Post Holdings 6178.T , SMC Corp 6273.T and Bridgestone 5108.T , will announce earnings results on Friday.

($1 = 106.0200 yen)

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