Nikkei reverses gains as property stocks fall

TOKYO, Mar 16: The Nikkei average reversed opening gains to fall 0.42 percent on Thursday as real estate firms and other recent gainers fell, offsetting gains in stocks with brighter earnings outlook such as Canon Inc.

Investors locked in profits from such stocks as Mitsui Fudosan Co. Ltd. due to growing concerns about the market's strength after a drop in trading volume.

Sony Corp. fell after the company late on Wednesday confirmed a newspaper report that it will delay the release of its new PlayStation 3 video game console until November.

The Nikkei was down 68.17 points at 16,250.87 as of 0105 GMT after rising 0.5 percent on Wednesday.

The broader TOPIX index was down 0.41 percent at 1,659.92.

''The market lacks direction as fewer investors take part in trading ahead of the fiscal year-end,'' said Teruhisa Ishikawa, manager at Mizuho Investors Securities' investment information department.

''But demand by retail investors for individual stocks remains brisk,'' he said.

Shares of Softbank Corp were down 1.3 percent at 3,020 yen after reports that U.S. private equity firms Providence Equity Partners and Cerberus Capital Management plan an offer for Vodafone Group Plc's Japanese unit, for which Softbank has already bid.

Canon gained 2.1 percent to 7,460 yen after a newspaper report that it would likely beat its January-March group net profit forecast, helped by strong sales of digital cameras and colour copiers.

Stocks with higher dividend yields were in favour, with mid-sized brokerage Marusan Securities Co. Ltd. rising 14.1 percent to 1,621 yen.

Marusan said it would pay annual dividend of 110 yen per share.

It paid 30 yen in the year ended in March 2005.

Toyota Tsusho Corp. gained 2.3 percent to 2,905 yen after the Nikkei average compiler Nihon Keizai Shimbun Inc. said late on Wednesday that Toyota Tsusho and INPEX Holdings, a holding entity to be created in April, will be added to the Nikkei 225 stock average.

Mitsui Fudosan, Japan's biggest real estate firm, was down 4.2 percent to 2,515 yen and No. 2 Mitsubishi Estate Co. Ltd.

dropped 4.6 percent to 2,420 yen.

The real estate sector subindex IRLTY.lost 3.5 percent, the worst performer among the Tokyo bourse's 33 industry sectors.

Sony declined for the third straight session, losing 1.5 percent to 5,390 yen.

REUTERS