Nikkei drops to 1-week low on halt of pension buying, soft Wall St
* No follow-through buying after end of pension funds' buying * Nikkei holds above 25-day average * Insurance companies lead losses By Hideyuki Sano TOKYO, July 8 (Reuters) - Japanese shares fell to one-week lows on Tuesday, pressured by an apparent halt in buying by public pension funds, losses on Wall Street and caution ahead of corporate earnings. Japan's Nikkei share average fell 0.8 percent to 15,261.68 points by late morning, touching its lowest level in a week, though it was still holding above major support from its 25-day moving average around 15,195. "The market has been capped lately as people think that buying by pension funds has come to an end," said Hideyuki Ishiguro, senior strategist at Okasan Securities. Reuters reported last month that three Japanese semi-public pension funds were buying stocks aggressively but that their buying could come to an end by the end of June. In one evidence of weak buying momentum in Tokyo markets, technical charts on the Nikkei have shown four straight days of black candlesticks until Monday, which means the market closed below the day's opening level. In other words, in the last four sessions, while a rally in global share prices had helped to lift Tokyo shares initially, prices fell as the trading day progressed, underscoring a lack of buying interest. Wall Street share succumbed to profit-taking after a strong rally on Monday, with the S&P 500 index declining 0.4 percent ahead of the start of earnings season, which kicks off with Alcoa later on Tuesday. In Japan, the peak of earnings will be later this month to early August. "At the moment, there's no catalyst for buying Tokyo shares. But the valuation is still cheap so if we have decent quarterly earnings, we could see more buying," said Hiroshi Ono, head of equity investment at Sumitomo Life. Market players say Japanese shares still look inexpensive, trading at less than 15 times the earnings, compared to around 17 times in the United States. The broader Topix fell 0.8 percent to 1,269.77 while the new JPX-Nikkei Index 400 shed 0.8 percent to 11,526.43. Insurance companies led the fall, falling 2.9 percent. T&D Holdings fell 3.7 percent while NKSJ Holdings fell 3.4 percent. Tokio Marine Holdings fell 3.2 percent. Nippon Steal & Sumitomo Metal Corp fell 2.4 percent. Bucking the trend, Casio Computer rose 6.0 percent after the company announced a plan to buy back 3.16 percent of its shares. (Editing by Kim Coghill)
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