* Gree sags after earnings miss expectations
* Sharp falls, Goldman Sachs sees more downside risk
* Japan replaces euro zone as most underweight region among
fund managers-poll
* Topix’s 12-mth forward P/B falls to 4-year low -Datastream
By Dominic Lau
TOKYO, Aug 15 (Reuters) – Japan’s Nikkei share average
slipped on Wednesday as weakness in banks offset gains in
exporters after the yen weakened against the dollar and the euro
on the back of stronger-than-expected U.S. retail sales and
German economic growth.
The Nikkei dipped 0.2 percent to 8,914.80 , facing
resistance at its 200-day moving average at 8,959.77.
Banks came under heavy selling pressure as some
investors shorted banking stocks in a low liquidity week when
many people were away for the Japanese summer “Obon” holidays.
“The banking index couldn’t break the 110-mark again. It’s
rangebound trade, so everyone just goes short on the megas in a
week where there is no liquidity,” a senior dealer at a European
brokerage said.
Sumitomo Mitsui Financial Group fell 2.1 percent,
Mitsubishi UFJ Financial Group lost 0.8 percent and
Mizuho Financial Group eased 1.6 percent.
Among the exporters that enjoyed a bounce were industrial
robot maker Fanuc Corp, Honda Motor Co, Canon
Inc and construction machinery maker Komatsu Ltd
, up between 0.7 and 2.2 percent.
Gree Inc sagged 5.3 percent after the social gaming
company’s full-year operating profit missed market expectations,
while its earnings guidance for this business year ending June
2013 also came in below analysts’ forecast.
It was the most traded stock on the main board by turnover,
followed by Sumitomo Mitsui Financial Group.
The sell-off came after a 14 percent rally in the previous
three sessions as investors had expected strong results from
Gree after rival DeNA Co Ltd beat market forecasts with
its quarterly earnings last Thursday. DeNA was up 0.4 percent
and the third-most traded stock.
UNDERPERFORMANCE
Japanese corporate earnings have been weak so far this
quarterly reporting season, with 53 percent of the 154 Nikkei
companies missing market expectations, data from Thomson Reuters
StarMine showed. That compared with misses of 40 percent in the
previously quarter’s earnings season.
The benchmark Nikkei is up 5.4 percent so far this year,
underperforming a 10.6 percent rise in the pan-European STOXX
Europe 600 index even though the region is grappling
with a sovereign debt crisis. The U.S. S&P; 500 has risen
11.6 percent this year.
FUND MANAGERS BEARISH
Japan has replaced the euro zone as the largest region in
which fund managers are underweight equities in the latest
monthly asset manager survey by Bank of America Merrill Lynch.
Nevertheless, valuations on Japanese equities remained cheap
compared with other developed markets. The Topix carried
a 12-month price-to-book ratio of 0.8, its lowest in four years
and below STOXX Europe 600’s 0.85 and S&P; 500’s 1.9, data from
Thomson Reuters Datastream.
The Topix eased 0.3 percent to 747.34 on Wednesday. Trading
volume was relatively light, at 42 percent of its full daily
average for the past 90 days.
“The market is bottoming but the upside is limited,” said
Shun Maruyama, chief Japan equity strategist at BNP Paribas.
“The sluggish market activity mainly comes from the
pessimism over the outlook for the medium-to-longer term,” he
said, noting growing concerns about the Chinese economic outlook
and the uncertainty of further stimulus from the U.S. Federal
Reserve.
Struggling consumer electronics maker Sharp Corp
sank 7.3 percent after Goldman Sachs warned of further downside
risk and cut its price target, while Deutsche Bank downgraded
its rating to ‘sell’ from ‘hold’.
According to data provider Markit, short interest in Sharp
increased, with 89.57 percent of its stock that is available to
be borrowed out on loan as of Aug. 13, up from 88.28 percent on
Aug. 10.
