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Tuesday July 06, 03:01
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Nikkei lost early gains on political concerns
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Tokyo stocks slipped on Tuesday as an upturn in the technology sector failed to offset price falls triggered by pre-election political uncertainty.
The Nikkei 225 average gained 0.3 per cent before midday but eventually closed down 0.6 per cent at 11,475.27, losing ground for a third consecutive session. The Topix index slipped 0.7 per cent to 1,148.99.
Seiko Epson, a leading maker of LCD screens for mobile phones, helped dispel some of the gloom hanging over the technology sector recently by raising its annual net profit forecast by 35 per cent to Y58bn on Monday evening. The company’s shares rose 13.1 per cent to Y4,320.
Technology shares have performed poorly in past weeks on concerns over a global oversupply of LCD screens and semiconductors.
Sharp was initially carried higher by the optimism at Seiko Epson, but closed up less than 0.1 per cent at Y1,694. Matsushita, owner of the Panasonic brand, was up 0.9 per cent at Y1,522 and Sanyo Electric gave up early gains to close down 1.4 per cent to Y636.
Political concerns continued to weigh on other sectors, as recent opinion polls suggest the ruling coalition could be weakened by elections for the upper house of parliament on July 11.
The government is highly unlikely to be toppled but prime minister Junichiro Koizumi could see his agenda thrown off course if he fails to meet his target for seats.
Shares in banks, many of which have cleaned up bad loans under government pressure, were generally lower. UFJ led the way, dropping 3.1 per cent to Y435,000.
Showa Shell, an oil refiner, climbed 4.1 per cent to Y1,011 after Royal Dutch/Shell sold part of its stake in the company to Saudi Aramco. The sale will reduce the Anglo-Dutch energy group’s stake to less than 40 per cent from 50 per cent at present.
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