Tokyo, Mar 28, 2008 (Jiji Press) - The benchmark Nikkei average ended a thin morning session almost flat on the Tokyo Stock Exchange Friday, with few investors willing to trade actively amid a lack of fresh incentives.
At the morning close, the 225-issue Nikkei average stood down 7.08 points from Thursday at 12,597.50. On Thursday, the Nikkei lost 102.05 points.
The TOPIX index of all first-section issues was down 0.67 point at 1,225.77, after finishing off 11.11 points in the previous session.
"The market is in a wait-and-see mood," said Toshihiko Matsuno, deputy equity general manager at SMBC Friend Securities Co. "Domestic institutional investors are on the sidelines before the end-March annual book closings. Other players are also quiet because there is little market movement."
Brokers said that the market's downside has been underpinned by hopes that a series of investment trust fund establishments on Friday will prompt some buying, while its topside has been weighed down by lingering concern about the health of the U.S. financial system.
Matsuno pointed out that a number of recent analyst reports warning of more subprime-related write-downs at U.S. financial institutions have increased global investors' risk-averse sentiment.
The jitters about the U.S. financial sector, together with disappointing December-February revenue for software giant Oracle, battered Wall Street overnight.
Hideyuki Suzuki, senior analyst at Morningstar Japan K.K., said Japanese corporate earnings outlooks also remain a source of worries.
"The combination of a strong yen and high oil prices is a heavy blow to many Japanese companies," said Suzuki. "Stock prices are yet to fully reflect earnings forecasts for the next fiscal year starting in April that are widely expected to be cautious."
Suzuki said that the market is likely to have entered a short-term downturn cycle after the Nikkei rebounded nearly 1,000 points from a 31-month closing low of 11,787.51 on March 17.
Losing issues eclipsed winners 837 to 700 on the TSE's first section in the morning, while 170 issues were flat.
Half-day volume came to 694 million shares.
The financial sector was weak, with banking groups Mizuho and Sumitomo Mitsui as well as brokerage house Nomura posting losses.
Meanwhile, export-oriented shares were mixed. Sony, Honda and Nissan fell, while Matsushita Electric Industrial, Fujitsu and Toyota headed higher.
Some defensives performed well, including Tokyo Electric Power and Tokyo Gas.
Toray rose following a media report that the company has created a new material for bendable organic electroluminescence displays.
Rising commodity prices lifted trading houses Mitsui, Mitsubishi and Sumitomo.
Copyright © 2010 JCN. All rights reserved. A division of Japan Corporate News Network KK.
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