Nikkei down 0.3 pct, Advantest falls

Tokyo, July 26: Japan's Nikkei average fell 0.26 per cent on Thursday, weighed down by Advantest Corp. following its lower quarterly profit, but losses were limited in cautious trade ahead of Sunday's election.

Shares of Nomura Holdings Inc. jumped more than 8 per cent after Japan's largest brokerage posted a surprise quadrupling of quarterly net profit on strong sales of investment trusts and several major deals, but said it may pull out of the troubled U.S. subprime mortgage market.

Zenshiro Mizuno, senior managing director at Marusan Securities, said corporate earnings results appear to be the main driving factors in the market, coupled with the currency moves.

''It appears investors' focus is tilting towards domestic shares, and investors are locking in profits in issues with global growth hopes, discouraged by a stronger yen,'' he said.

''But both gains and losses are likely to be limited before the election as investors want to see the outcome and how the market will react to it.'' An election for half the seats in the upper house of Japan's parliament will be held on Sunday, with the ruling Liberal Democratic Party seen faring poorly due to funding scandals and voter anger over lost pension records.

A defeat for the ruling camp could see Prime Minister Shinzo Abe to resign and Japan return to the short-lived governments of the past. Political uncertainty could trigger selling of stocks.

The Nikkei was down 46.93 points at 17,811.49 as of 0053 GMT.

On Wednesday, it finished at its lowest since June 27 at 17,858.42.

The broader TOPIX index shed 0.21 per cent to 1,750.30.

The dollar inched up 0.1 per cent to 120.55 yen pulling away from the 119.80 yen level, its weakest in 2-{ months, touched on Wednesday.

Shares of Advantest, a maker of chip testing devices, tumbled 4.4 per cent to 4,960 yen after it posted a 13.3 per cent fall in group net profit for the three months to June due partly to sluggish orders.

Shares of Nomura Holdings were up 8.5 per cent at 2,300 yen.

Elsewhere,Elpida Memory Inc. jumped 4.3 per cent to 5,610 yen after the world's fourth-biggest computer memory maker posted a smaller-than-expected 59 per cent fall in quarterly operating profit on Wednesday and said it expected chip prices to recover.

Reuters

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