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Nikkei slips on soft earnings, U.S. tech worries

10/25/2021 | 03:28am EST

TOKYO, Oct 25 (Reuters) - Japanese stocks dropped on Monday on disappointing earnings, with semiconductor-related shares among the hardest hit, taking their cue from falls in U.S. tech firms on poor earnings and concerns about the Federal Reserve's tapering.

The Nikkei 225 Index fell 204 points or 0.71% to 28,600.41, at one point slipping below 28,500 to a 10-day low. The broader Topix was down 0.34 % at 1,995.42.

Semi-conductor stocks lost 0.94%, with Tokyo Electron down 1.2% and Screen Holdings falling 2% after U.S. Nasdaq shares fell on Friday on disappointing quarterly reports from Snap and Intel Corp.

The stocks that gained the most among the top 30 core Topix names included Recruit Holdings Co Ltd, while underperformers included SoftBank Group Corp, which was down 3.37%.

Japan's ruling coalition's defeat in Sunday's by-election was a surprise and discouraged market players from buying ahead of this week's general election, Koichi Kurose, chief strategist at Resona Asset Management, said.

The national election https://www.reuters.com/world/asia-pacific/main-parties-contesting-japans-lower-house-poll-2021-10-07 on Oct. 31 is key to whether new Prime Minister Fumio Kishida is able to go ahead with big spending plans for the economy, which is showing some signs of recovery.

The ruling Liberal Democratic Party (LDP) and its junior coalition partner currently have a near two-thirds majority of the 465 seats in the house. Kishida is hoping they retain a majority, despite an opposition candidate winning one of two upper house by-elections at the weekend.

Richly-valued U.S. tech shares had also come under pressure after Federal Reserve Chair Jerome Powell discussed stimulus tapering.

Some Japanese corporate earnings on Friday also struck a downbeat note and Canon Electronics was flat after nine-month earnings fell well short of the full 2021 targets.

Ube Industries dropped 3.4% after the chemical firm trimmed its annual net profit outlook even as it boosted its top-line forecast.

Stanley Electric ended flat after the maker of automobile lighting equipment maker lowered its earnings outlook for the half year that ended in September, citing a global plunge in car production and rising costs.

But Tokyo Steel jumped almost 16% after the steelmaker bumped up its annual profit outlook and boosted dividend estimates.

Chugai Pharmaceutical rose 10.4% after the drugmaker posted upbeat earnings due to its cocktail treatment for COVID-19.. (Reporting by Hideyuki Sano; Additional reporting by Tokyo Markets team and Vidya Ranganathan; Editing by Alexander Smith)

ę Reuters 2021
Stocks mentioned in the article
ChangeLast1st jan.
CANON ELECTRONICS INC. -2.17% 1532 End-of-day quote.2.20%
CHUGAI PHARMACEUTICAL CO., LTD. -3.28% 3925 End-of-day quote.-28.68%
FAST RETAILING CO., LTD. -3.29% 71630 End-of-day quote.-22.54%
INTEL CORPORATION -1.97% 48.78 Delayed Quote.-2.09%
JAPAN POST HOLDINGS CO., LTD. -1.10% 868.3 End-of-day quote.8.16%
KDDI CORPORATION -2.26% 3420 End-of-day quote.11.55%
PANASONIC CORPORATION -2.81% 1316 End-of-day quote.10.54%
RECRUIT HOLDINGS CO., LTD. -0.95% 7011 End-of-day quote.62.25%
SCREEN HOLDINGS CO., LTD. -1.54% 11490 End-of-day quote.51.18%
SOFTBANK GROUP CORP. -5.19% 6336 End-of-day quote.-21.37%
SONY GROUP CORPORATION -1.93% 13985 End-of-day quote.35.97%
STANLEY ELECTRIC CO., LTD. -1.88% 3130 End-of-day quote.-5.86%
SUMITOMO HEAVY INDUSTRIES, LTD. -3.60% 2648 End-of-day quote.4.01%
TOKYO ELECTRON LIMITED -2.31% 60840 End-of-day quote.58.44%
TOKYO STEEL MANUFACTURING CO.,LTD. -2.48% 1295 End-of-day quote.93.86%
UBE INDUSTRIES, LTD. -1.59% 1985 End-of-day quote.6.04%
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