Nikkei edges down on concerns over global growth; chip-related shares rally

Published 2019/01/24, 05:47
Updated 2019/01/24, 05:50
© Reuters.  Nikkei edges down on concerns over global growth; chip-related shares rally

* Hopes for Pope Francis's visit to Hiroshima, Nagasaki, lift tourism-linked shares

* Advantest, Tokyo Electron shine on Texas Instruments' earnings beat

By Ayai Tomisawa

TOKYO, Jan 24 (Reuters) - Japan's Nikkei edged lower on Thursday morning as lingering concerns about the global economy and international trade frictions hurt sentiment, but chip-related stocks outperformed after Texas Instruments alleviated worries about chip demand.

The Nikkei share average .N225 dropped 0.4 percent to 20,506.81 at the midday break, but managed to stay above its 25-day moving average of 20,447.77.

Index-heavy Fast Retailing 9983.T slumped 2.6 percent and contributed a hefty 50 negative points to the index.

Turnover has been low recently as investors are on the sidelines, analysts said. On the Tokyo Stock Exchange's main board, turnover was below 2 trillion yen for the past three days.

"Investors are not overly pessimistic about Japanese equities' fundamentals despite weak earnings from some companies such as Nidec," said Takuya Takahashi, a strategist at Daiwa Securities.

With the International Monetary Fund cutting its global growth outlook on Monday, investor sentiment has stayed sour, he said.

The IMF cut its 2019 and 2020 global growth forecasts, citing a bigger-than-expected slowdown in China and the eurozone, and said failure to resolve trade tensions could further destabilise a slowing global economy.

Bucking the weakness, chip equipment makers Advantest Corp 6857.T surged 4.5 percent, Tokyo Electron 8035.T jumped 3 percent and Nikon Corp 7731.T , which makes stepper, rallied 5 percent, after Texas Instruments Inc TXN.O beat Wall Street's profit estimates. Investors had feared the worst after warnings of a slowing smartphone market from Apple Inc AAPL.O . the brighter side, hopes for Pope Francis's proposed visit to Japan in November - the first do so since John Paul II nearly 40 years ago - lifted tourism-linked stocks.

According to Kyodo News, he has expressed his desire to visit the atomic-bombed cities of Hiroshima and Nagasaki and offer prayers for the victims of the U.S. atomic bombings of the cities.

The Kyodo report pushed up travel agency firm H.I.S. Co 9603.T , which rose 1.5 percent and Ringer Hut 8200.T , which operates Nagasaki-style noodle restaurants, advanced 0.2 percent.

Kyushu Railway 9142.T rose 0.1 percent, outperforming the rail road sector .IRAIL.T which fell 0.7 percent and was the worst sectoral performer.

The broader Topix .TOPX was flat at 1,547.10.

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