Nikkei falls; Egypt riots spark shift out of stocks

By Ayai Tomisawa

Reuters

TOKYO: Japan’s Nikkei fell 1.2 percent on Monday as anti-government rioting in Egypt prompted investors to shun riskier assets, with analysts adding that the blow to sentiment comes at a time when the benchmark appeared due for a correction.

Disappointing earnings outlooks from Fujitsu (6702.T) and Konica Minolta (4902.T) also dragged the Nikkei lower and as investors sought safe-haven assets the yen gained, putting additional pressure on shares of exporters.

But oil-related stocks like oil explorer Inpex (1605.T) gained as Brent crude surged to a 28-month peak near $100 a barrel on worries that the unrest in Egypt could spread and disrupt oil shipments through the Suez Canal.

The Nikkei has gained some 13 percent since early November as foreigners piled into lagging Tokyo equities but market players say that bull-run could be drawing to a close, despite expectations of strong October-December results overall from Japanese corporations.

Over the past three sessions, foreign investors have placed net sell orders before the market opened.

“As you can see in pre-market foreign sell orders over the past few days, there have been changes in foreign sentiment towards Japanese stocks,” said Yoshinori Nagano, a senior strategist at Daiwa Asset Management.

The benchmark Nikkei .N225 lost 126.60 points to 10,233.74. It may continue to find support at 10,150 for the day, analysts said.

“Momentum has been falling… and in the short term it has broken the support of the 50-day moving average (of 10,277) and is looking to test the 200-day moving average at 9,871,” said Jamie Coutts, a technical analyst at BGC Securities.

The broader Topix shed 1.1 percent to 909.32. –Additional reporting by Antoni Slodkowski

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