Nikkei falls as banks' earning forecasts disappoint

  • Reuters
  • Stock Market News
Nikkei falls as banks' earning forecasts disappoint
Credit: © Reuters.

* SMFG, Mizuho sold after keeping full-year forecasts, U.S. bank sector decline

* Amada soars after raising forecast, share buyback

* Nvidia's earnings focused - analyst

By Ayai Tomisawa

TOKYO, Nov 15 (Reuters) - Japan's Nikkei fell on Thursday, with banking stocks sliding after disappointing earnings forecasts and losses in U.S. financial shares.

Selling in large market cap stocks such as SoftBank and Fanuc also dented the market.

The Nikkei share average .N225 dropped 0.5 percent to 21,728.34 points by midmorning.

Analysts said investors were disappointed after Japanese mega banks which reported their second-quarter earnings on the previous day did not raise their annual forecasts.

The banking sector .IBNKS.T was the worst sectoral performer, tumbling 2.4 percent.

Sumitomo Mitsui Financial Group 8316.T dropped 3 percent, while Mizuho Financial Group 8411.T shed 1.8 percent.

SMFG posted a 37 percent rise in its second-quarter net profit, but it kept its profit forecast at 700 billion yen for the year ending March, below the 751.9 billion yen average of 14 analyst estimates compiled by Refinitiv. reported flat growth in net profit in the three months through September, and kept its profit forecast at 570 billion yen, down 1.1 percent from the year prior but above the 567.1 billion yen average of 14 analyst estimates compiled by Refinitiv. sell-off in the U.S. financial sector overnight added to the market's sour mood.

U.S. financial shares were hit by fears that regulations on the banking industry would tighten once the Democratic Party takes control of the U.S. House of Representatives. banks' earnings were unimpressive, while negative sentiment in the U.S. financial sector was contagious," said Takuya Takahashi, a strategist at Daiwa Securities.

He said the market is now focused on the third-quarter earrings result by U.S. chipmaker Nvidia Corp's NVDA.O later in the day, which is expected to report a rise in its quarterly revenue.

"It's one of the companies which led the U.S. market gains this year, and the result will become an indication of the chip industry's outlook which will also affect Japanese chip-related companies like Tokyo Electron and Advantest," Takahashi said.

Index-heavy SoftBank Group Corp 9984.T declined 3.3 percent and Fanuc Ltd 6954.T shed 2.4 percent, taking off a hefty 42 negative points from the Nikkei benchmark index.

Bucking the weakness, Amada Holdings 6113.T jumped 10 percent after the metal press products maker raised its operating profit forecast for the year through March to 43 billion yen from 40.5 billion yen.

It also said it would buy back up to 10 billion of its own shares, or 2.73 percent of shares outstanding.

The broader Topix .TOPX shed 0.4 percent to 1,634.55. (Editing by Kim Coghill)

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