Japanese shares retreat from highs as traders lock in profits; JFE slides

JFE Holdings

05/09/2023 03:56

By Kevin Buckland
       TOKYO, Sept 5 (Reuters) - Japanese stocks retreated
after reaching fresh highs on Tuesday, as the breaching of key
levels spurred traders to lock in profits, while speculation
about new share sales also weighed on sentiment.
    The Nikkei 225 share average  .N225  declined 0.21% to
32,870.00 as of the midday recess, after briefly popping above
the psychological 33,000 mark for the first time in more than a
month early in the session.
    The broader Topix  .TOPX  slipped 0.36% to 2,365.14, after
renewing a 33-year high by reaching 2,379.57.
    Both indexes are on track to snap six-day winning streaks.
    JFE Holdings led decliners on the Nikkei by a wide margin,
sliding 8.51% after the Nikkei newspaper said the steelmaker
seeks to raise as much as 120 billion yen ($818.39
million)through a public share offering and another 90 billion
yen by offering a five-year convertible bond to international
investors in September.
    Following the report, the company said its board will
discuss a fundraising plan totalling 200 billion yen.
    The iron & steel sector  .ISTEL.T  was by far the worst
performer among the Tokyo Stock Exchange's 33 industry groups,
tumbling 2.46%. It had led advancers with a 4.11% rally a day
earlier.
    "I'm not surprised to see some weakness in the market
today," said Kenji Abe, an equity strategist at Daiwa
Securities. "Japanese stocks have performed so well, it's very
natural for investors to take some profits."
    Meanwhile, the JFE news "raises concerns about the supply
and demand balance for Japanese equities," he said. "Now, stock
prices are high, so I think more companies may consider issuing
new equities."
    Overall though, Abe expects the Nikkei to gradually rise
towards his end-March forecast of 35,000, buoyed in the near
term by upward revisions to analysts' earnings estimates
following this summer's strong earnings season. 
        
($1 = 146.6300 yen)

 (Reporting by Kevin Buckland; Editing by Janane Venkatraman)
 ((Kevin.Buckland@thomsonreuters.com;))