TOKYO, May 16 (Reuters) - Japan's Nikkei stock average shed
most of its early gains on Monday as data showing a
sharper-than-expected slowdown at factories in major trade
partner China offset the boost from a tech-driven rally on Wall
Street on Friday.
The Nikkei entered the midday break up 0.24% at
26,492.29 after earlier rising as much as 1.55% to a one-week
high of 26,836.96.
Despite the small gain, there were more than twice as many
losers as winners among the index's 225 component stocks.
The broader Topix slipped 0.14% to 1,861.64 after
opening the day about 1% higher.
China's industrial production unexpectedly fell 2.9% last
month, while retail sales shrank a bigger-than-forecast 11.1%
amid stringent coronavirus curbs on activity.
The deepening slowdown overshadowed strong gains in U.S.
stocks on Friday, led by the Nasdaq's 3.7% advance. The
Philadelphia SE Semiconductor Index jumped 5% on the day.
"The risks from China's slowdown are one of the main reasons
for the poor sentiment in equity markets," said Masayuki
Kichikawa, chief macro strategist at Sumitomo Mitsui Asset
Management in Tokyo.
"At the same time, we may be close to the peak in terms of
China concerns," with the government now starting to ease
COVID-19 restrictions, he said.
Shanghai will gradually begin reopening businesses such as
shopping malls and hair salons from Monday, following weeks of
On the Nikkei, tech was the best performing sector, up
0.74%, while basic materials led the losers with a drop of
1.10%, followed by a 1.05% slide for utilities.
Earnings results also divided the market, with Friday
marking the climax of the reporting season. For instance,
precision parts maker NTN Corp was the biggest
percentage gainer with a 12.15% surge compared with Dowa
Holdings' 13.26% tumble.
Automakers were also split, with Mazda rallying a
further 5.06% following gains on Friday after its earnings.
But Honda slumped 4.25% on a disappointing earnings
forecast given after Friday's close. Motorcycle-maker Yamaha
sank 9.32%, having reported underwhelming results after
the bell on Friday.
(Editing by Aditya Soni)