Nikkei slips on profit-taking after hitting 33-month high

Thu Jan 31, 2013 3:24am GMT

* Nikkei still heading for best January performance since
1998
    * Lender SMFG jumps after 9-mth earnings top full-yr f'cast
    * Nintendo sags after forecasting 2nd year of loss
    * Two-thirds of Nikkei firms reporting earnings so far miss
market f'cast

    By Tomo Uetake
    TOKYO, Jan 31 (Reuters) - Japan's Nikkei average fell on
Thursday, with investors booking profits after it had risen
sharply in the previous session to end above 11,000 for the
first time in 33 months.
    But gains in lender Sumitomo Mitsui Financial Group
, which announced its strong quarterly results on
Wednesday, lent support to the market. 
    By the midday break, the Nikkei shed 0.6 percent to
11,046.24 after briefly hitting a new 33-month high of
11,138.50. The index is still up 6.3 percent so far this month,
on track for its best January performance since 1998, after
rallying 22.9 percent in 2012. 
    The broader Topix ended the morning session down 0.1
percent to 933.77 in relatively active trade, with volume at 77
percent of its full daily average for the past 90 trading days.
    "Securities and banking stocks lent support to Topix. SMFG's
positive earnings results have encouraged investors to buy
banking stocks. Expectation for earnings of major brokerages,
such as Nomura and Daiwa, are also high," said Masayuki Otani,
chief market analyst at Securities Japan.
    Sumitomo Mitsui Financial Group climbed 3 percent after its
ninth-month earnings handily beat its operating profit forecast
for the full-year ending March. 
    Rivals Mitsubishi UFJ Financial Group and Mizuho
Financial Group gained 2.4 percent and 2.3 percent,
respectively.
    Nomura Holdings, Japan's top brokerage, added 1.2
percent ahead of its quarterly results later in the day. 
    Despite the weaker yen, companies have so far reported
lacklustre earnings for the October-December quarter. Of the 26
Nikkei companies that have announced quarterly results so far,
nearly two-thirds have missed market expectations, according to
Thomson Reuters StarMine. That compared with 56 percent in the
previous three months.
    
    ADVANTEST, NINTENDO DOWN 
    Chip-making equipment maker Advantest Corp was
among those that reported weaker-than-expected earnings this
quarter. The stock lost 3.3 percent after it announced its
third-quarter earnings and cut its full-year operating profit
forecast after the market close on Wednesday.
    Video game maker Nintendo Co Ltd dropped 5 percent
after it said it would post an operating loss for a second
straight year as sales of the Wii U, the successor to its Wii
console, faltered. 
    "Profit-taking is rising. But the Nikkei's five-day moving
average, which stands at around 10,955, will be serving as
support," said Otani of Securities Japan. 
    The softer yen, which is expected to boost exporters'
earnings, has lifted the appeal of Japanese equities, with
foreign investors remaining net buyers last week for an 11th
consecutive week. They bought a net 248.6 billion yen ($2.73
billion) worth of equities in the week through Jan. 26, data
from the Ministry of Finance showed.
    Driven by the recent rally, Japanese equities are slightly
more expensive than their U.S. peers. The Topix carries a
12-month forward price-to-earnings ratio of 13.4, versus the
U.S. S&P 500's 13.3 and the pan-European STOXX Europe
60's 11.9, data from Thomson Reuters Datastream showed.
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