Nikkei starts year with modest loss

The Nikkei 225 average fell moderately Monday, the first trading day of 2015, caught in a tug of war between selling triggered by weak U.S. stocks during the New Year’s holiday period in Japan and buying on dips.

The Nikkei finished down 42.06 points, or 0.24 percent, at 17,408.71. On Tuesday, the last day of 2014 trading, the key market gauge dived 279.07 points.

The Topix shed 6.42 points, or 0.46 percent, to end at 1,401.09. The index ended down 17.16 points Tuesday.

Both indexes extended their losing streaks to a third session.

The TSE started the new year with sharp losses following lackluster performance of New York stocks during the holiday period as well as the worse than expected U.S. Institute for Supply Management’s (ISM) manufacturing business index for December, released Friday, brokers said.

In the afternoon, the Nikkei popped up into positive territory thanks presumably to the Bank of Japan’s buying of exchange-traded funds, and index futures-led purchases as well as buying on dips, brokers said. Nevertheless, the index fell into negative territory in the late afternoon as buying did not continue, they said.

The Nikkei briefly tumbled more than 230 points amid heightened wariness over the course of the U.S. and Chinese economies following the announcements of the dismal ISM figure and the weak Chinese purchasing managers’ index for December, released Thursday, brokers said.

“Some sense of market overheating prevailed in the market. Still, the yen’s downward trend and improving corporate scorecards have been underpinning stock prices. Japanese stocks are undervalued than overseas equities,” said Hiroichi Nishi, equity general manager at SMBC Nikko Securities Inc.

Market participants retreated to the sidelines Monday prior to the releases of a number of key economic indicators abroad, including U.S. government employment data for December, due out Friday, brokers said.

Despite the key indexes’ drops, rising issues outnumbered falling ones 931 to 807 on the first section, while 121 issues were unchanged.

Volume increased to 2.09 billion shares from Tuesday’s 1.67 billion shares.

Skymark Airlines rocketed 17.12 percent on expectations that the company will decide on third-party new share allotment at an extraordinary shareholders’ meeting in February, brokers said.

Also on the plus side were clothing retailer Fast Retailing, Tepco and electronics maker Hitachi.

Oil distributors JX Holdings, Showa Shell and Idemitsu Kosan were downbeat after a key crude oil futures contract ended at its lowest level in some five years and eight months on Friday.

Automakers Toyota, Nissan and Mazda were sluggish reflecting a halt in the yen’s weakening and the ISM data, brokers said.

In index futures trading on the Osaka Exchange, the key March contract on the Nikkei average rose 20 points to end at 17,380.

Nikkei Futures

nikkeifutures.org@imediaone.com

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