Nikkei drops, latest U.S.-China tensions hurt investor mood

  • Reuters
  • Stock Market News
Nikkei drops, latest U.S.-China tensions hurt investor mood
Credit: © Reuters.

TOKYO, Oct 9 (Reuters) - Japanese shares fell on Wednesday as escalating U.S.-China tensions dimmed hopes for a deal in high-level trade talks this week and soured the mood of investors.

The Nikkei share average .N225 fell 0.61% to 21,456.38 while the broader Topix .TOPX lost 0.30% to 1,581.70, though both had pared earlier losses and advancing shares outpaced declining stocks.

Washington on Tuesday imposed visa restrictions on Chinese officials for the detention or abuse of Muslim minorities, a move Beijing denounced as interference in its internal affairs.

The U.S. decision cast a pall over high-level trade talks set for Thursday and Friday in the U.S. capital. technology shares led Tokyo's decline, with robot maker Fanuc 6954.T down 1.6% and Keyence 6861.T off 1.2%.

Chip-related shares were hit the hardest, with Sumco 3436.T , a maker of silicon wafers, down 3.4% and Advantest 6857.T falling 2.4%.

"There is profit-taking in chip related stocks after big gains yesterday as the sector is susceptible to the U.S.-China relations," said Nobuhiko Kuramochi, chief strategist at Mizuho Securities.

"The big fall in Phiadelphia semiconductor stock index also hurt the sentiment," he added.

AGC 5201.T dropped 2.9% after the glass maker said it expected a 36% drop in annual net profit due to an impairment in its auto glass business.

Nissan Motor 7201.T fell 1.1%, a bit more than the overall market, after automaker said its new CEO is an executive known for close ties to top shareholder Renault RENA.PA . stocks attracted buyers. Kao 4452.T , a manufacturer of toiletries, rose 1.6%, while retailer Seven&I Holdings 3382.T gained 0.7%.

Kansai Electric Power 9503.T rose 2.5% after media reported its chairman has decided to resign amid a graft scandal that has rocked public trust in Japan's second-largest utility.

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