Nikkei down as drugmakers, food firms retreat; Sharp gains on restructuring hopes
* Sharp rises to 4-month high on restructuring hopes * Oil shares soar after oil prices rallied By Ayai Tomisawa TOKYO, April 16 (Reuters) - Japanese stocks slipped to more than a one-week low on Thursday morning as investors cut back on some recent outperformers including food companies and drugmakers, while Sharp Corp surged on restructuring hopes. Sharp rallied as much as 4.2 percent to a four-month high after a source said it and its main banks are to meet on Thursday to agree on a nearly $2 billion rescue for the loss-making electronics firm. The Nikkei 225 dropped 0.5 percent to 19,761.53 in midmorning trade after hitting a low of 19,751.05, the weakest level since April 8. The benchmark has been slowly receding from the psychologically important 20,000-mark hit last Friday. Rising oil prices lifted oil and mining stocks, with Inpex Corp soaring 3.6 percent, Japan Petroleum Exploration gaining 2.1 percent and JX Holdings advancing 3.1 percent. Oil prices rallied and U.S. crude jumped nearly 6 percent to a 2015 peak on Wednesday after government data showed crude oil inventories in the United States rose less than expected last week. Airline shares, which are beneficiaries of lower oil prices, underperformed. Japan Airlines dropped 2.7 percent and ANA Holdings shed 0.9 percent. "It's sector rotation. Investors are unwinding their 'cheap oil' positions," said Nobuhiko Kuramochi, a strategist at Mizuho Securities. Among losers were defensive stocks such as food companies and drugmakers, which Kuramochi said have rallied in recent months partly on 'smart beta' investing by pension funds. Smart beta indexes are rule-based indexes designed to provide focused exposure to specific factors such as low volatility stocks. Market observers said that long-term investors such as pension funds, keen to avoid volatility, have taken to smart beta indexes. The food sector, which has soared 18 percent this year, is down 0.5 percent while the pharmaceutical sector , up 22 percent this year, shed 1.1 percent. Soy sauce maker Kikkoman Corp fell 2.2 percent after rising 27 percent this year, while Takeda Pharmaceutical Co dropped 1.0 percent after rallying 19 percent. Over the same period, the Nikkei has risen 13 percent. The broader Topix dropped 0.3 percent to 1,583.62, and the JPX-Nikkei Index 400 declined 0.4 percent to 14,352.70. (Editing by Shri Navaratnam)
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