March 7, 2019 / 2:46 AM / 2 months ago

Nikkei slides to week low dragged by chip-related firms, Renesas dives

* Advantest, Tokyo Electron tumble after Micron’s slide

* Renesas biggest pct loser after production halt at 6 plants

By Ayai Tomisawa

TOKYO, March 7 (Reuters) - Japan’s Nikkei slid to a one-week low on Thursday morning with chip-related stocks leading the decline in step with U.S. counterparts, while Mizuho Financial Group underperformed after it sharply cut its annual profit outlook.

The Nikkei share average dropped 0.7 percent to 21,440.50 at the midday break, after hitting as low as 21,416.94, the lowest level since Feb. 28. The benchmark index will find support at its 25-day moving average of 21,212, analysts said.

The market had climbed to three-month highs on Monday, recovering from the year’s low in December, making it vulnerable to profit-taking, analysts added.

“Profit-taking makes sense now as ongoing U.S.-China trade talks, major concerns for the market, have provided no signs of exit plan while the market had risen smoothly for the past two months,” said Hikaru Sato, a senior technical analyst at Daiwa Securities.

Chip equipment makers Advantest Corp dropped 2.7 percent, Tokyo Electron plunged 3.6 percent and silicon products maker Sumco Corp dived 7.3 percent on further doubts the industry’s downturn is near a bottom. Cleveland Research cut earnings per share and revenue estimates in this fiscal year for Micron due to weaker-than-expected DRAM and NAND pricing feedback for the first quarter and second quarter.

Micron slid more than 5 percent overnight, leading the Philadelphia semiconductor index down for the second day in a row. Advanced Micro Devices tumbled 4.6 percent, Broadcom shed 2 percent, and Nvidia slipped 2.9 percent.

Mizuho dropped more than 2 percent after it slashed its full-year profit outlook by 86 percent, citing one-time restructuring costs of 680 billion yen ($6 billion) at its bank and brokerage units and an overhaul of its securities portfolio.

Elsewhere, Renesas Electronics nosedived 15 percent to a daily limit-low of 584 yen after news that the automotive chipmaker plans to halt production at six plants in Japan for a total of up to two months this year. It was the biggest percentage loser on the board.

The broader Topix dropped 0.8 percent to 1,601.73. (Editing by Jacqueline Wong)

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