Nikkei Falls As Hedge Funds Take Profits Before End Of Q1

Mar 27 2015 | 6:26am ET

By Ayai Tomisawa (Reuters) - Japan's Nikkei share average gave up early gains and fell to its lowest level in more than a week on Friday, led by futures selling as hedge funds took profits from its recent rise.

The Nikkei benchmark fell 1.0 percent to 19,285.63 points, the lowest closing level since March 16. It had hit a fresh, 15-year high of 19,778.60 on Monday.
   
Volume of Nikkei 225 futures was high, with about 100,000 contracts made, the highest since March 11.

"Hedge funds and commodity trading advisers are seen taking profits and unwinding their options positions before the first quarter ends," said a senior trader at a foreign brokerage.
   
For the week, the Nikkei benchmark dropped 1.4 percent, snapping its 6-week winning streak and the biggest weekly drop since mid-January.
   
Analysts said that long-term views on the Japanese market
remained positive based on hopes of buying by Japanese pension funds including the Government Pension Investment Fund as well as expectations for better shareholder returns and rosy
corporate earnings.
   
Exporters suffered, with Toyota Motor Corp falling 1.4 percent, Honda Motor Co dropping 1.6 percent and Nikon Corp shedding 2.5 percent.
    
Toshiba Corp dropped 3.4 percent after SanDisk Corp cut its revenue outlook and its shares tumbled 18.4 percent overnight. SanDisk buys wafers for its NAND chips from a joint venture with Toshiba.
   
Bucking the weakness, Panasonic rose 3.2 percent after it said it was ready to spend 1 trillion yen ($8.4 billion) on acquisitions over the next four years.
 
The broader Topix dropped 1.0 percent to 1,552.78, with 31 of its 33 subsectors in the red. Volume was high, with 2.57 billion shares changing hands, the highest level in two weeks.
   
The JPX-Nikkei Index 400 declined 0.9 percent to 14,134.57.
   
June 10-year JGB futures shed 0.42 point to close at 147.44, after dropping as low as 146.99, their lowest since March 16.


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