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Nikkei down on profit taking, Microsoft hurts techs

Written by: Staff
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TOKYO, Mar 22 (Reuters) The Nikkei average fell 0.78 per cent on Wednesday as investors took profits in Softbank Corp. and other recent gainers, while a delay in a new Microsoft operating system hit some technology stocks.

''After the recent rises, investors were ready to take profits and selling picked up after the Microsoft news,'' said Tsuyoshi Nomaguchi, strategist at Daiwa Securities Co. Ltd.

Technology stocks lost ground after Microsoft Corp. said it would delay the consumer launch of its Windows Vista operating system, but steel stocks drew buyers for their relatively high dividends, helping the TOPIX index curb its losses.

The Nikkei lost 129.32 points to end at 16,495.48, after rising 528 points in the previous two sessions to its highest close since Feb. 7. The capital-weighted TOPIX index of all first-section shares was down 0.11 per cent at 1,686.35.

The Tokyo market was closed on Tuesday for a national holiday.

Chip stocks were hit, with Elpida Memory Inc. falling 3.1 per cent to 4,090 yen and Tokyo Electron Ltd. slipping 1.1 per cent to 7,490 yen.

Katsuhiko Mori, senior portfolio manager at Daiwa SB Investments, said the impact of the delay of Windows Vista should be limited, but the outlook for the technology sector remain uncertain.

''The latter half of this year looks uncertain, especially the demand and supply conditions for the semiconductor equipment sector,'' he said.

Softbank, an Internet communications conglomerate, came under profit-taking pressure and fell 3.5 per cent to 3,080 yen. It had risen 5.6 per cent in the last two sessions on the news that it had agreed to buy the struggling Japan unit of Vodafone Group Plc for 1.8 trillion yen.

On the other hand, investors flocked to steel stocks, seeking high dividend payments as the deadline for being able to receive these payments comes early next week, before the end of the fiscal year on March 31.

JFE Holdings Inc. was up 2.4 per cent at 4,630 yen and Nippon Steel Corp. rose 0.7 per cent to 462 yen.

These stocks have dividend yields of nearly 2 per cent, compared with an average of about 1 per cent for Nikkei 225 components.

TDK Corp. may gain on Thursday after saying following the market close that it now expects to pay a record dividend of 90 yen per share for the business year ending this month, up from its earlier plan for 80 yen. TDK ended down 0.7 per cent on Wednesday at 8,780 yen.

One notable share was copier and camera maker Canon Inc., which gained 0.4 per cent to 7,690 yen after earlier hitting a lifetime high of 7,830 yen.

JP Morgan analysts Hisashi Moriyama and David Jacobson said in a report on Monday they had upgraded the stock to ''overweight'' from ''neutral'', adding that Canon shares have not yet priced in growth potential.

Nissan Motor Co. rose after the world's No.2 truck maker Volvo AB said on Tuesday it bought a 13 percent stake in Nissan Diesel Motor Co. from Nissan Motor for 5 million to strengthen its Asian operations.

Nissan Motor was up 1 per cent at 1,373 yen and Nissan Diesel was up 4.8 per cent at 694 yen.

Gainers outnumbered decliners 923 to 659 on the Tokyo exchange's first section. Trading volume rose to 2.04 billion shares, the highest total since March 10.

REUTERS SD SSC1419

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