Nikkei seen down on techs after Nasdaq falls

Tokyo, May 24 : Japanese stocks are expected to extend recent falls on Wednesday, as technology shares follow declines in their U.S. counterparts and bank shares are likely to be hit by continued selling from individual investors.

The U.S. tech-laden Nasdaq market dropped for the 10th day in the past 11 on Tuesday amid fears that the Federal Reserve may need to raise interest rates to fight inflation even as economic growth slows.

Global equity market turbulence, rooted in investor worries about the strength of the U.S. economy, helped send Tokyo's benchmark Nikkei average to its lowest close in three months on Tuesday.

It has lost almost 2,000 points since it hit an almost six-year peak above 17,500 in April.

''It looks like now is a chance to buy after the Nikkei's retreat by almost 2,000 points from its peak. But the Nikkei could test the 15,500 mark today in order for us to believe that a floor is hit for now,'' said Koichi Seki, a sales marketing manager at Chuo Securities.

Selling may continue from individual investors who have faced margin calls due to declines in the value of shareholdings they bought with loans, he added.

Individual investors have bought bank shares and energy-related stocks among other issues in the past few months.

Traders expect the Nikkei average to move between 15,450 and 15,650 on Wednesday.

On Tuesday it fell 1.63 percent to 15,599.20, its lowest close since Feb. 20.

In Chicago, Nikkei futures expiring in June closed at 15,565, a gain of 5 points from the Osaka finish.

Companies to announce full-year earnings later in the day include Square Enix Co. Ltd, Millea Holdings Inc. and Sompo Japan Insurance Inc.

Reuters