Tokyo shares struggle to maintain gains; falling oil prices drag on energy names

Yee Hop Holdings

28/05/2018 08:05

* Some positive developments seen in geopolitics
    * Oil selloffs weigh on oil-related shares
    * Airlines gain on lower oil prices
    * Trading subdued with US, UK markets closed for holidays

    By Tomo Uetake
    TOKYO, May 28 (Reuters) - Japanese shares ended little
changed on Monday as a further slide in oil prices pulled down
energy-related stocks, offsetting initial gains stemming from
renewed hopes for a U.S.-North Korea summit next month.
    The benchmark Nikkei share average  .N225  closed up 0.1
percent at 22,481.09, giving up much of the 0.4 percent gain
seen in early trade.
    The broader Topix  .TOPX  slipped 0.1 percent to 1,770.42,
with the JPX-Nikkei Index 400  .JPXNK400  closed virtually flat
at 15,662.22.
    As oil prices extended their sharp declines on Monday  O/R ,
oil refinery and exploration companies were hit hard, with Japex
 1662.T  and JXTG  5020.T  shedding 3.2 and 4.2 percent,
respectively.
    But lower fuel prices benefited the air transport sector,
with its index  .IAIRL.T , advancing 1.9 percent.
    Although the Nikkei had opened higher on optimism that the
historic summit between United States and North Korea may be
back on track, most investors were cautious and kept to the
sidelines.
    "Although there are some new developments in geopolitics --
the revived talks for U.S.-North Korean summit and Italian
president's decision to defend the euro -- these are reasons 
'not to sell', rather than 'to buy,'" said Yuya Fukue, trader at
Rheos Capital Works.
    President Donald Trump said on Sunday a U.S. team had
arrived in North Korea to prepare for a proposed summit with 
North Korean leader Kim Jong Un, which Trump pulled out of last
week before reconsidering.  urn:newsml:reuters.com:*:nL2N1SY065
    Developments in Italy were also giving investors pause.
    Italy's president rejected the nomination of a prominent
eurosceptic for the key economy ministry, a decision that led to
a collapse in efforts to form a coalition government, triggering
a possible constitutional crisis and opening the prospect of
fresh elections.  urn:newsml:reuters.com:*:nL5N1SY0FQ
    Trade was subdued, with turnover of just 1.81 trillion yen,
the lowest in nearly two months, as British and U.S. markets
were closed on Monday for the spring bank holiday and Memorial
Day, respectively.


 (Reporting by Tomo Uetake; Editing by Kim Coghill and Eric
Meijer)
 ((tomo.uetake@thomsonreuters.com; +81-3-6441-1645; Reuters
Messaging: tomo.uetake.thomsonreuters.com@reuters.net))