Nikkei sags as Sony slips

The Nikkei share average dropped 0.61 percent on Wednesday as Sony Corp and TDK Corp declined after raising their profit forecasts more cautiously than investors had expected. Investors sold Honda Motor Co Ltd, Toshiba Corp, and Fujitsu Ltd ahead of their earnings announcements.
After the market closed, Honda reported higher quarterly profit and raised its forecast for the full year. Toshiba too said quarterly profit more than tripled and it slightly lifted its full-year outlook, while Fujitsu reported lower profit.
"Analysts had given very bullish forecasts and investors bought shares. But the results did not meet expectations, prompting these people to take profits," said Hiroyuki Fukunaga, chief strategist at Rakuten Securities' research division.
Shares of Fujifilm Holdings Corp rose sharply on its unexpectedly strong quarterly profit while NTT Data Corp surged after the company lifted its dividend forecast.
The Nikkei was down 106.77 points at 17,383.42. The broader TOPIX index lost 0.56 percent to 1,721.96. Masayuki Kubota, fund manager at Japanese Equity Management Group at Daiwa SB Investments, said the market struggled to advance following a sluggish performance by the US market.
Both the Nikkei and the Dow Jones industrial average have moved up less than 1 percent since the beginning of this year. "Unlike before, the engine for Japanese economic growth is exports, not domestic demand," Kubota said. "So when the US stock market falters, so does the Japanese stock market."
Trade volume remained active with 2.1 billion shares changing hands, compared with last year's daily volume average of 1.9 billion shares. Decliners outnumbered advancers by a ratio of three to one. Shares of Nikko Cordial Corp plunged 14.5 percent as the results of the company's investigation into an earnings-manipulation scandal reinforced worries that Japan's third-largest brokerage may be delisted.
Sony declined 1.4 percent to 5,550 yen after the electronics firm posted a 15 percent fall in quarterly operating profit on Tuesday and raised its annual outlook.
Still, Hideyuki Suzuki, investment information manager at SBI Securities, said investors were just taking profits for now and the share price may recover soon.
Electronics components maker TDK slipped 0.3 percent to 10,140 yen. The company raised its full-year profit forecast by 3.3 percent to 63 billion yen on Tuesday, only slightly above the 61 billion yen consensus forecast of analysts polled by Reuters Estimates. There were also concerns that price declines and rising inventories could hurt component makers.
Other parts makers were also down, with Kyocera Corp off 0.9 percent and Murata Manufacturing Co Ltd falling 2.1 percent. In the technology sector, Sharp Corp posted strong quarterly profit and stuck to its annual forecast. Prior to the announcement, Sharp ended up 2 percent.
NTT Data jumped 3.7 percent after the major systems integrator raised its annual dividend forecast to 5,000 yen from its previous estimate of 4,000 yen. Meanwhile, its group company NTT DoCoMo Inc after the market close said its operating profit fell but kept its annual forecast.