Japan's Nikkei stock average fell nearly 1 percent on Monday, dragged lower by chipmakers after disappointing guidance from a US peer and as investors booked profits after the Nikkei hit an eight-month high last week. But falls were checked by gains in property developers such as Sumitomo Realty & Development after Daiwa Institute of Research hiked its rating on the real estate sector to "neutral" from "underweight", citing ongoing improvements in credit markets and global confidence.
The underlying trend still seems to be towards higher share prices, said Tsutomu Yamada, market analyst at Kabu.com Securities. "Investors are buying due to the improvement in the global economy, and it is as if stock markets are rising in unison," Yamada said. The Nikkei, which closed above 10,000 on Friday for the first time in eight months, could rise towards 10,800 over the next month and test resistance at the top of the cloud on weekly Ichimoku charts, Yamada said.
The benchmark Nikkei shed 96.15 points to 10,039.67 after closing at 10,135.82 on Friday, its highest close since early October. The broader Topix fell 0.4 percent to 946.82. "We've verified that markets have bottomed out but we have yet to see what sort of form the recovery will take and we need clear proof that it will continue," said Masayoshi Okamoto, head of trading at Jujiya Securities.
With the Nikkei having hit 10,000, many investors want to book profits before this week's US indicators, he added. US May housing starts, producer prices and industrial production are set to be released on Tuesday, with consumer prices coming out on Wednesday. Markets will also be watching a summit of leaders from Russia, China, India and Brazil - the producers of 15 percent of global output - to be held in Russia on Tuesday.
National Semiconductor on Friday posted quarterly results and gave an outlook that topped Wall Street's estimates, but its guidance fell short in comparison to an outlook from fellow chipmaker Texas Instruments earlier in the week. National Semiconductor's shares fell 6.1 percent while the Philadelphia Semiconductor Index lost 1.8 percent.
That hit tech shares here, with Advantest Corp, a maker of semiconductor testing devices, losing 4.6 percent to 1,764 yen and Tokyo Electron - a top-ranked manufacturer of chip devices - down 5.4 percent at 4,690 yen. Property shares powered higher on the Daiwa upgrade.
Comprehensive real estate developer Sumitomo Realty & Development gained 6.8 percent to 1,792 yen, fellow developer Tokyu Land climbed 5.7 percent to 463 yen and Mitsui Fudosan rose 3.2 percent to 1,757 yen. Sumitomo Mitsui Financial Group Inc fell 6.9 percent to 4,050 yen after the Nikkei business daily reported over the weekend that a planned share issue by Japan's third-largest bank is expected to raise more than 900 billion yen ($9.2 billion).
The share issue, which could reach close to 1 trillion yen, would be up from SMFG's April plan to raise up to 800 billion yen, the Nikkei said. Reuters last month reported that SMFG's share issue could reach $9.1 billion. Japan Tobacco bucked the trend to rise 7.3 percent to 325,000 yen after the world's third-largest cigarette maker said on Friday it would buy British tobacco leaf company Tribac Leaf Ltd's business operations to secure a stable tobacco leaf supply. Advancing shares outnumbered declining ones by nearly 2 to 1. Trade was active with 2.5 billion shares changing hands on the Tokyo exchange's first section, in line with last week's daily average.
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