Tokyo: Shares slip as chip stocks take hit from outlook worries

[TOKYO] Japanese shares fell on Thursday, after four straight sessions of gains, as chip-related shares were hit by concerns that their best days may be over as supplies are coming back.

The country's worsening coronavirus infections hit shares of travel-related sectors anew, while falling support for Prime Minister Yoshihide Suga raised more concerns about political stability ahead of an election expected later this year.

The tech-heavy Nikkei share average fell 0.20 per cent to 28,015.02, with its early gains blocked by resistance from a downward-sloping trendline at around 28,270.

The broader Topix fared less badly, ending down 0.03 per cent at 1,953.55.

"The Nikkei still appeared to be kept in a downward trend, reflecting concerns about the tech sector while the Topix is essentially moving sideways," said Fumio Matsumoto, chief strategist at Okasan Securities.

"It's not like markets expect Japan's Covid-19 situation to deteriorate sharply. But it is hard to see it improving quickly either," he added.

Market players said chip-related shares were hit by a Morgan Stanley report that called on investors to be cautious on the sector, saying some parts of the memory chip market could be peaking out.

Sumco lost 2.7 per cent, Advantest shed 2.2 per cent and Screen Holdings fell 1.8 per cent.

Worries about China's recent crackdown on the tech sector continued to weigh on SoftBank Group, which holds a big stake in Alibaba and some other Chinese tech firms.

SoftBank fell 0.9 per cent to hit a nine-month closing low.

Rakuten Group, a mobile phone services and online shopping mall operator, lost 6.4 per cent after its earnings missed estimates, while Toshiba fell 4.1 per cent on reporting mediocre results.

TSE land transport index, mainly composed of train operators, was the worst performing industry subindex with a fall of 0.94 per cent, followed by a 0.75 per cent slip in airline companies On the other hand, SMC Corp rose 3.7 per cent after the industrial equipment maker raised its annual operating profit forecast by 15.6 per cent.

REUTERS