REFILE-Nikkei falls to 2-1/2-wk low, SoftBank tumbles on M&A disappointment
(Fixes grammar in 9th paragraph) * SoftBank contributes hefty negative points to Nikkei * Wall Street drop, Ukraine tensions curb risk appetites By Ayai Tomisawa TOKYO, Aug 6 (Reuters) - Japanese stocks dropped to a 2-1/2-week low on Wednesday morning, hit by a sharp slide in SoftBank Corp after its U.S. subsidiary Sprint Corp abandoned its bid to acquire T-Mobile U.S. Inc. The mood was already bearish on Wall Street's decline over tensions in Ukraine, which dragged the Nikkei share average down 0.8 percent to 15,190.99 in mid-morning trade. The index fell to an intra-session low of 15,187.15, the weakest since July 18. Index heavy-weight SoftBank tumbled 4.8 percent and was the most traded stock by turnover, and accounted for a hefty 30 negative points - more than a quarter of the Nikkei's losses. Reuters reported that Sprint has pulled its bid to acquire No. 4 U.S. carrier T-Mobile because the challenge of securing regulatory approval for the deal was too steep, citing a person familiar with the matter. The announcements would signal the end of a prolonged push by Sprint's parent company, SoftBank, to acquire rival T-Mobile. Analysts said investors were generally cautions given the tensions in Ukraine and other negative news, including Argentina's debt crisis. Still, the main focus for many remains the timing of the U.S. Federal Reserve's rate tightening-cycle, they said. "Ukraine worries have become a reason to take profits. But the real concern in the market is when the Fed will raise interest rates," said Norihiro Fujito, a senior investment strategist at Mitsubishi UFJ Morgan Stanley Securities. "The market has started to look beyond a 'post-tapering' market." Data on Tuesday showed U.S. services sector activity hit an 8-1/2 year high last month and factory orders surged in June, which fanned speculation Fed policymakers would speed up rate hikes now expected in 2015. Investors are also focused on quarterly corporate earnings, which have so far come in largely above expectations. Masayuki Doshida, senior market analyst at Rakuten Securities, said that companies with good earning outlooks such as Bandai Namco Holdings are in demand. The stock jumped 12 percent. Toyota Motor Corp posted a forecast-beating 4.4 percent rise in April-June operating profit and raised its North America vehicle sales target for the year to next March, boosted by strong sales of SUVs and pickup trucks in the United States, its biggest market. Toyota, however, dropped 0.7 percent as it stepped back from three-week highs hit last week. Other exporters including Honda Motor Co and Sony Corp shed 0.7 percent and 1.9 percent. The broader Topix dropped 0.9 percent to 1,252.16, and the JPX-Nikkei Index 400 also declined 0.9 percent to 11,399.68. (Additional reporting by Hideyuki Sano; Editing by Shri Navaratnam)
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