Japan's Nikkei posts first weekly drop in five as tech drags
JAPAN’S Nikkei share average drifted lower on Friday (Dec 1) to post its first weekly drop in five, as tech shares slumped on elevated bond yields after economic data provided more clues that the US Federal Reserve could end rate hikes.
Technology companies tend to be highly leveraged, making them sensitive to changes in interest rates.
The Nikkei ended the day 0.17 per cent lower at 33,431.51, and lost 0.58 per cent this week.
Technology was the only sector to decline in the Nikkei index. Among the 225 components, 97 fell, 125 climbed, while three were trading flat.
The broader, less tech-centric Topix rose 0.32 per cent, but slumped 0.35 per cent for the week. Topix value stocks gained 0.62 per cent, versus a marginal 0.01 per cent climb for growth shares.
Japan’s long-term yields added 3.5 basis points to 0.705 per cent on Friday, tracking an overnight rebound in US Treasury yields, following three days of steep declines.
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“Yields are rebounding, and that’s a weight on stocks,” said Maki Sawada, a strategist at Nomura Securities.
“The Nikkei doesn’t look like it can retake 38,000 in the current environment,” she added. “Investors have been taking the opportunity to lock in profit.”
The benchmark index logged its best monthly gain in November in three years, touching a fresh 33-year peak on Nov 20 at 33,853.46, although the momentum dissipated thereafter.
Four of Nikkei’s five biggest drags on Friday were technology shares.
Startup investor SoftBank Group declined 1.66 per cent, while chip-making equipment giant Tokyo Electron slid 0.73 per cent and chip-testing machinery maker Advantest dropped 1.26 per cent. Shares of TDK slid 1.57 per cent.
The other was heavily weighted Uniqlo store operator Fast Retailing, which fell 1.04 per cent.
At the other end, automakers drew support from the yen’s overnight pullback from multi-week highs to the dollar . Toyota and Honda gained close to 1.4 per cent each.
The biggest gainer was Seven & i Holdings, jumping 5.31 per cent after the operator of 7-Eleven stores announced it bought the Australian 7-Eleven chain. REUTERS
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