November 14, 2018 / 3:16 AM / 7 months ago

Nikkei edges lower in choppy trade; resource shares underperform

* Mining, trading house stocks fall on weaker oil prices

* Airline shares soar on lower fuel cost outlook

By Ayai Tomisawa

TOKYO, Nov 14 (Reuters) - Japan’s Nikkei edged lower in choppy trade on Wednesday morning as investors sold resource stocks after oil prices plunged. Electronic components makers offset some of the resources losses, rising as investors bought back shares after Tuesday’s heavy sell-off.

The Nikkei share average fell 0.1 percent to 21,874.17 at the midday break, after trading in positive territory earlier. On Tuesday, the Nikkei tumbled to a two-week low, dragged down by the sell-off in tech shares and Apple suppliers.

“It was a surprise that the market opened up today,” said Shusuke Yamada, chief Japan FX and equity strategist at Bank Of Japan Merrill Lynch. “What investors are focused on the most is development in U.S.-China trade talks so the market will likely remain tense for a while.”

U.S. President Donald Trump’s top economic adviser said on Tuesday that the United States welcomed the resumption of talks with China on trade, while Vice President Mike Pence warned Beijing to change its behaviour to avoid a new cold war with the United States.

Mining stocks and trading houses, whose businesses rely on commodity prices, were sold after oil prices tumbled 7 percent on Tuesday hit by ongoing worries about weakening global demand and oversupply.

On Wednesday Inpex Corp shed 2.4 percent, Japan Petroleum Exploration Co slipped 3.5 percent, Marubeni Corp dropped 2.0 percent and Mitsui & Co tumbled 2.5 percent.

The airline sector, on the other hand, surged 1.9 percent, with both ANA Holdings and Japan Airlines soaring 1.8 percent as investors cheered lower fuel costs.

Short-covering helped such Apple suppliers as Murata Manufacturing and TDK Corp, which rose 0.5 percent and 2.9 percent, respectively.

Elsewhere, Mitsubishi UFJ Financial Group, which surged 1.7 percent after the bank raised its net profit outlook to 950 billion yen from 850 billion yen for the fiscal year ending March.

It also said it would buy back up to 100 billion yen of its shares, or 1.52 percent of outstanding shares.

Tokyo Seimitsu soared 16 percent after it raised its net profit forecast to 13.6 billion yen from 12.8 billion yen for the year ending March thanks to strong sales of semiconductor manufacturing equipment.

The broader Topix was flat at 1,638.56.

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