Tokyo, Aug. 8 (Jiji Press)--The benchmark Nikkei average ended a morning session modestly lower after recouping the bulk of its loss stemming from a sharp pullback on Wall Street overnight.
After briefly slipping below 13,000, the 225-issue Nikkei average stood down 74.03 points at 13,050.96 at the morning close. On Thursday, the Nikkei lost 129.90 points.
The TOPIX index of all first-section issues was down 10.96 points at 1,247.85. The index finished off 18.46 points in the previous session.
In early trading here, the sharp plunge on Wall Street overnight sparked selling in a wide range of sectors, pushing the Nikkei average down 162 points at one point.
But selling pressure gradually waned as investors found some solace in sharp gains in shares of Toyota Motor despite the Japanese auto giant's sluggish earnings results released on Thursday.
Toyota's April-June group operating profit plunged 38.9 pct from a year before because of the yen's appreciation, higher material prices and weak demand in North America.(MORE)Nikkei Cuts Loss after Brief Slip below 13,000
"Market players are saying that Toyota, recently hit by earnings worries, is bought back because the company did not revise down its full-year earnings forecasts yesterday and relieved investors," said Teruhisa Ishikawa, equity manager at Mizuho Investors Securities Co.
Ishikawa also pointed out that hedge funds nowadays tend to neutralize their positions after earnings releases for unknown reasons, covering short positions and liquidating long positions regardless of earnings outcome.
Ishikawa therefore expects the market to regain stability next week as Japan's quarterly earnings reporting season passes its peak on Friday.
Some brokers also voiced hopes that Toyota's gains are a sign that the market has mostly factored in Japanese companies' sluggish earnings prospects.
They also pointed out that the Tokyo market on Thursday priced in Wall Street's possible dive later in the day since a multibillion- dollar quarterly loss at American International Group Inc. was announced after Wednesday's close of the U.S. market.
Still, Hideyuki Suzuki, senior analyst at Morningstar Japan K.K., said the market will continue to face a series of slack Japanese and U.S. macroeconomic data, which would certain to cap the market's topside.
Losers eclipsed winners 1,086 to 490 on the TSE's first section in the morning, while 109 issues were flat.
Half-day volume came to 1,146 million shares.(MORE)Nikkei Cuts Loss after Brief Slip below 13,000
Major losers were in the financial sector after the AIG earnings news battered many financials on Wall Street overnight. Banking groups Mitsubishi UFJ, Mizuho and Sumitomo Mitsui sank, as did brokerage houses Nomura and Daiwa.
Other major domestic demand-related shares were also generally weak, including real estate firms Mitsui Fudosan, Mitsubishi Estate and Sumitomo Realty.
On the other hand, Honda and Mazda advanced as did Toyota.
Among technology companies, chipmaking equipment makers Tokyo Electron and Advantest posted gains.END
(c) 2008 Jiji Press English News Service. Provided by ProQuest Information and Learning. All rights Reserved.
Story Source: Jiji Press English News Service
