Nikkei extends loss as metal, recent gainers slip

Tokyo, July 24: Japan's Nikkei average extended losses on Tuesday from a one-month closing low hit the previous day, with recent gainers such as Sumitomo Metal Mining Co. Ltd. and other metal stocks down in cautious trade ahead of the earnings season peak and this weekend's election.

Shares of real estate fund KK DaVinci Advisors tumbled 6.3 per cent to 96,500 yen after it said it failed in a 103 billion yen (0.9 million) hostile bid for building leasing firm TOC Inc. TOC fell 2.6 per cent to 1,222 yen.

Katsuhiko Kodama, a senior strategist at Toyo Securities, said investors are holding back before earnings announcements by major high-tech companies such as Matsushita Electric Industries Co. Ltd.

and Sharp Corp. on Wednesday and the upper house election on Sunday.

''The current market environment is preventing it from going upward and providing factors to turn weaker,'' he said.

Half the seats in the upper house of Japan's parliament are up for grabs in the July 29 poll, with the ruling Liberal Democratic Party seen faring poorly after funding scandals and voter anger over lost pension records.

''Still, if a sell-off takes place after the election, that would be a good time to buy as investors still have high hopes for corporate earnings,'' Kodama said.

The Nikkei average was down 0.18 per cent or 32.32 points at 17,931.32 as of 0056 GMT. On Monday, it fell 1.07 per cent to finish at 17,963.64, the lowest close since June 28.

The broader TOPIX index inched lower 0.05 per cent to 1,756.42.

Shares of metal stocks fell with Sumitomo Metal dropping 2.5 per cent to 3,140, while Mitsui Mining and Smelting Co. Ltd. lost 2.1 per cent to 608 yen.

Another recent gainer, Nippon Steel Corp., declined 1.8 per cent to 941 yen.

Reuters>