Tokyo shares end morning lower amid inflation worries in US, Europe

Tokyo shares end morning lower amid inflation worries in US, Europe - UPDATE

	Published : Fri, 12 Oct 2007 03:45 By : Agencies Print this Story

TOKYO (Thomson Financial) - Japanese shares ended Friday morning lower as investors locked in some gains from the previous session on renewed concern on Wall Street about inflation in the US and Europe.

Financial and export-oriented stocks led the declines amid worries about the outlook for financial markets and the economies in the US and Europe, while the shipping sector continued to rally on hopes for strong demand for cargo transportation to and from emerging economies.

The Nikkei 225 Stock Average closed the session down 79.64 points or 0.5 percent at 17,379.34.

The broader TOPIX index dropped 11.14 points or 0.7 percent to 1,666.38.

Decliners beat gainers 949 to 628, with 146 issues unchanged.

Volume increased to an estimated 972 million shares from 858 million shares Thursday morning, mainly because of technical trading linked to the fixing of special quotations for settling the October options contracts.

Investors generally held back ahead of the weekend and after the Nikkei's rise Thursday to its highest level in 2-1/2 months.

But the selling was limited by strong hopes for solid corporate earnings in the near term, driven by economic expansion in China and Asia generally, and in other emerging markets and Europe.

'Sentiment continues to be supported by the positive outlook on corporate earnings. Given the weaker tone of the yen in recent sessions, there are strong expectations that companies will upgrade their full year earnings estimates,' said Hiroichi Nishi, general manager of equities at Nikko Cordial Securities.

A weak yen helps boost export earnings of Japanese companies. The first-half reporting season will begin later this month.

Among individual stocks, Mitsubishi UFJ Financial Group shed 27 yen or 2.3 percent to 1,151. Toyota Motor fell 130 yen or 1.9 percent to 6,560, while Sony dropped 240 yen or 4.2 percent to 5,540.

In the shipping sector, Nippon Yusen edged up 17 yen or 1.4 percent to 1,230 as Mitsui OSK Lines climbed 12 yen or 0.6 percent to 1,983.

Among stocks in the news, Fast Retailing plunged 540 yen or 7.2 percent to 6,970 after the Japanese casual clothing chain operator said its net profit dropped 21.4 percent to 31.77 billion yen in the year to August and that it will pay a smaller dividend than previously forecast.

Daiei slipped 1 yen or 0.1 percent to 902 after the supermarket operator downgraded Thursday its earnings estimates for the first half to August. The company will release its official results later this afternoon, which will include an update on its full year outlook.

Sanyo Electric rose 5 yen or 2.6 percent to 196, while Kyocera lost 180 yen or 1.7 percent to 10,660, after the companies said Thursday they will start talks about transferring Sanyo's loss-making cellphone operations to Kyocera.

(1 US dollar = 117.26 yen)

yumiko.nishitani@thomson.com

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Tokyo shares end morning lower amid inflation worries in US, Europe - UPDATE