Nikkei touches 6-week low in choppy trade; automakers fall

Published 11-12-2018, 07:53 am
Updated 11-12-2018, 08:01 am
© Reuters.  Nikkei touches 6-week low in choppy trade; automakers fall

* Banks, insurers underperform on global growth concerns

* Automakers fall after U.S. peers make demands for a trade deal

* Retail investors selling stocks for SoftBank listing - analysts

By Ayai Tomisawa

TOKYO, Dec 11 (Reuters) - Japan's Nikkei bounced around on Tuesday morning, but was mostly in the red as worries about global growth pressured financial stocks and uncertainty over a U.S.-Japan trade deal hit automakers.

The Nikkei share average .N225 , briefly up after the opening, was down 0.2 percent to 21,284.61 in midmorning trade.

Earlier, it was off 0.7 percent to a six-week low of 21,062.31. If the index falls below 20,971.93, it will be at the lowest level since March.

The broader Topix .TOPX fell 1 percent to 1,573.45, the lowest level since June 2017.

Financial shares underperformed, dragged down by a sell-off in global peers such as Citigroup (NYSE:C) C.N and Bank of America (NYSE:BAC) BAC.N , after uncertainty over Britain's exit from the European Union kept investors on edge about global growth.

Mitsubishi UFJ Financial Group 8306.T tumbled 2.5 percent and Mizuho Financial Group 8411.T shed 1.4 percent.

"As investors are worried about the impact on slowing global growth and interest rates on banks, they are likely to avoid buying banking shares for a while," said Takuya Takahashi, a strategist at Daiwa Securities.

Life insurers, which invest in higher-yielding products such as foreign bonds, lost ground as well. Dai-ichi Life Holdings 8750.T slid 2.3 percent, T&D Holdings 8795.T 2.5 percent and MS&AD Insurance 8725.T 1.9 percent.

Automakers were sold after Detroit peers and labour unions on Monday insisted that any U.S. trade deal with Japan contain strong provisions to combat currency manipulation and pry open Japan's largely closed auto market before lowering any U.S. autos tariffs. Motor 7267.T fell 0.8 percent, Nissan Motor 7201.T plunged 2.7 percent and Subaru Corp 7270.T tanked 2.1 percent.

Analysts said retail investors are seen selling some of their overall holdings to prepare for the Dec. 19 listing of SoftBank Group's 9984.T telco unit SoftBank Corp's 9434.T . said that demand was greater than the number of shares on offer.

"Retail investors are seen taking profits on some of their holdings to buy SoftBank shares today as it takes several days to convert stocks to cash," said Norihiro Fujito, a chief investment strategist at Mitsubishi UFJ Morgan Stanley (NYSE:MS) Securities.

"Their selling is also thought to be one of the reasons for the market's weakness."

Defensive stocks outperformed. Chubu Electric Power Co 9502.T rose 1.0 percent, Tokyo Gas 9531.T advanced 1.2 percent and realtor Mitsui Fudosan 8801.T gained 1 percent. (Editing by Richard Borsuk)

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