Japan stocks hit by Wall Street drop, concerns about global slowdown

domingo 26 de julio de 2015 22:06 GYT

* Nikkei below key 25-day moving average for 1st time in 2
    * Domestic earnings expectations lift some local companies

    By Ayai Tomisawa
    TOKYO, July 27 (Reuters) - Japan's Nikkei share average fell
on Monday, hit by losses in U.S. shares after dismal corporate
earnings soured the mood and as worries about slowing global
growth capped risk appetite.
    The Nikkei share average dropped 0.8 percent to
20,377.45 points by mid-morning, falling below its 25-day moving
average of 20,420.36 for the first time in two weeks.
    The S&P 500 and Nasdaq posted their largest weekly drops
since March on Friday, while weaker equities in turn helped push
U.S. Treasury yields further down.
    "Investors are concerned that the Fed may raise the rates
while there is question on whether its economy is strong enough
to accommodate that," said Masashi Oda, senior investment
officer at Sumitomo Mitsui Trust Bank. 
    The Fed's rate-setting Open Market Committee meets on
Tuesday and Wednesday and is considered highly unlikely to lift
interest rates just yet, though it does still seem set on a move
in September.
    The global economy started the second half of the year on
shaky ground with China's factory sector activity contracting in
July at the fastest pace in 15 months and euro zone
manufacturing weaker than expected, although U.S. activity
picked up. 
    Oda said that the Japanese market will likely continue
outperforming its global peers due to expectations for the
recovering economy and stronger corporate profits.
    "Companies which rely on domestic demand as well as those
which benefit from inbound tourism demand are expected to show
strong results," Oda said.
    On Monday, financial stocks were lower as investors avoided
risk taking. Nomura Securities fell 1.6 percent, and
Sumitomo Mitsui Financial Group shed 1.1 percent.
    Some companies whose earnings are due out this week were in
the spotlight.
    Nippon Yusen rose 2.4 percent after the Nikkei
business daily reported that the shipper's pretax profit for the
April-June quarter likely jumped 70 percent on the year to about
20 billion yen.
    Kose Corp jumped 4.6 percent after the paper
reported that the cosmetics maker's net profit likely quadrupled
to more than 4 billion yen for the period. 
    The broader Topix fell 0.6 percent to 1,645.52 and
the JPX-Nikkei Index 400 declined 0.6 percent to

 (Editing by Kim Coghill)