April 26, 2019 / 2:31 AM / 3 months ago

REFILE-Nikkei slips to 2-week low on weak earnings, 5G star Anritsu plunges

(Refiles to add dropped letter in headline)

* Investors square positions ahead of 10-day holiday

* Anritsu plunges 15 pct, Nintendo, Zozo down on earnings

* Investors uncertain on strength of China recovery

By Hideyuki Sano

TOKYO, April 26 (Reuters) - Japan’s Nikkei share average fell on Friday following disappointing earnings from high-tech firms and as market players wind down for the 10-day holiday to celebrate the enthronement of Crown Prince Naruhito.

By late morning, the Nikkei was down 0.7 percent at 22,149 points, fulling further away from a 4-1/2-month high hit earlier this week, while the broader Topix dropped 0.8 percent to 1607.78.

Anritsu, one of the best performing shares in the past two years on hopes of 5G-related demand, tumbled 15 percent after its cautious earnings guidance disappointed investors.

The firm saw a 16 percent fall in net profits in the year to March to 7.5 billion yen ($67.17 million), about 8 percent below mean analysts forecast. Anritsu shares prices had hit 19-year highs last month, having tripled in over two years.

The poor results hit other shares that have benefited from 5G theme.

Advantest, which forecast a 54 percent fall in operating profits this financial year from record profits in the previous year, fell as much as 10.5 percent.

Weak guidance from U.S. chipmakers Intel and Xilinx dented growing optimism that the worst is over for the sector, which has been hit by concerns over Sino-U.S. trade wars.

“Judging from our hearings, the Chinese economy, including the semi-conductor sector, does appear to have bottomed out in January and February. But people are not sure how strong a recovery it will be,” said Tetsuro Ii, president of Commons Asset Management.

“Whether it will be a V-shaped recovery, or U-shaped or L-shaped, nobody really has a clear idea,” he said.

Nintendo fell as much as 5 percent after the gaming company offered conservative earnings guidance and urged caution on the roll-out of its Switch console in China.

Zozo fell as much as 10 percent after rising 4 percent in a volatile trade as the market digested its latest earnings. The online fashion retailer said it expects profits to recover in the current fiscal year after booking its first-ever annual drop in earnings.

“We have to see whether the company can achieve the guidance. The market is not convinced as fashion brands are leaving the site. Its revenue in January-March grew just 4 percent, a very low figure for Zozo, which had maintained double-digit growth for years,” said Hiroshi Masushima, market analyst at Monex Securities.

Shares of brokerage firms also slumped after weak earnings, with Daiwa falling 1.7 percent to near three-year lows, and Nomura shedding 1.0 percent.

All but two of the Tokyo Stock Exchange’s 33 industry sub-indexes fell.

Many players were squaring positions ahead of the long holiday from April 27 through May 6, the longest market closure in modern history, not wanting to be hit by sudden moves in global markets during this period.

One of few bright spots was Hino Motors, which rose as much as 10.6 percent after the truck maker announced profit growth in the financial year that ended in March and the current year.

Kyocera rose as much as 5.9 percent to 15-month highs after the company gave upbeat guidance and raised its dividend payout ratio by 10 percentage point to 50 percent. ($1 = 111.6600 yen) (Editing by Kim Coghill)

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