January 22, 2019 / 2:47 AM / 3 months ago

Nikkei dips as global growth concerns sap risk appetite

* IMF cuts global growth forecasts

* Companies with big China exposure fall

* Totech soars after raising earnings forecast

By Ayai Tomisawa

TOKYO, Jan 22 (Reuters) - Japan’s Nikkei edged lower on Tuesday in choppy trade, retreating from a one-month high as investors took profits from recent gainers amid concerns about slowing global economic growth.

The Nikkei share average had dipped 0.1 percent to 20,706.66 points by the midday break after moving in and out of positive and negative territory. It ended at over a one-month high on Monday.

“There were hopes for a resolution to the trade dispute between the United States and China lately and most people expect that the two countries will reach a resolution,” said Isao Kubo, equity strategist at Nissay Asset Management.

But he added that while markets awaited more news from trade negotiations, worries about global growth mounted.

The International Monetary Fund on Monday cut its world economic growth forecasts for 2019 and 2020 due to weakness in Europe and some emerging markets, and said failure to resolve trade tensions could further destabilise a slowing global economy.

The IMF’s downgrade came hours after China reported its weakest quarterly growth since the financial crisis and its slowest annual expansion in 28 years, with further cooling expected this year.

Adding to sour sentiment, U.S. stock futures , which indicate how Wall Street will likely open, fell 0.5 percent. U.S. markets were closed on Monday for a holiday.

Recent gainers such as machinery makers which have large exposure to China as well as chip-related stocks lost ground, with Fanuc Corp falling 1.4 percent, Yaskawa Electric dropping 0.9 percent and Tokyo Electron shedding 0.8 percent.

Bucking the weakness, Takeda Pharmaceutical soared as much as 2.5 percent after Bloomberg reported that the drugmaker is considering a sale of some emerging-market drugs, as it expands a push to cut debt after its $62 billion takeover of Shire Plc, citing people familiar with the matter.

Air-conditioning system maker Totech Corp jumped 11 percent after it raised its net profit outlook for the year ending March to 3.6 billion yen form 3.2 billion yen.

The broader Topix shed 0.2 percent to 1,562.80. Declining issues outnumbered advancing ones 1,307 to 700. (Editing by Kim Coghill)

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