Japan’s Nikkei share average trimmed earlier modest losses and steadied on Tuesday, as the shock from a slide in U.S. technology shares began to ease. The Nikkei was a fraction lower, down 0.05 percent at 19,899.14, after dipping to 19,850.86 soon after the open. The index had fallen 0.5 percent on Monday after U.S. tech heavyweights such as Apple Inc suffered heavy losses. The Nasdaq extended losses from Friday’s plunge and slipped on Monday as tech, still the best performing S&P 500 sector this year, continued to succumb under its own weight. The Nikkei slipped early on Tuesday in a knee-jerk reaction, but eventually cancelled out those losses.
“Domestic equities have stood on a relatively firm footing, thanks to strength of some individual shares, and this is helping the broader market absorb negative external pressures,” said Hitoshi Ishiyama, chief strategist at Sumitomo Mitsui Asset Management. “The view that some U.S. tech shares are going through inevitable adjustments while retaining a positive outlook is also lessening the impact on the domestic market.” Overall, movements were limited ahead of the Federal Reserve’s two-day policy meeting that ends on Wednesday, at which the central bank is expected to raise interest rates.
Investors will focus on any fresh hints on the pace of further tightening and any details of the central bank’s plans to trim its balance sheet. Utilities, drug makers and other defensive stocks performed relatively well. Tokyo Electric Power Holdings (TEPCO) edged up 0.4 percent. Takeda Pharmaceutical Co rose 0.3 percent and brewer Kirin Holdings Co climbed 0.7 percent.
Renesas Electronics Corp dropped as much as 8.8 percent to 946 yen after the semiconductor manufacturer set the share price of its secondary offer at 825 yen, a discount of about 20 percent from Monday’s closing price of 1,037 yen. Toshiba Corp extended gains from the previous day and rose as much as 4.5 percent to 344 yen, the highest since December 2016.
Apple and computing giant Dell Inc will join a Foxconn-led consortium bidding for Toshiba’s highly-prized chip unit, the CEO of the world’s largest contract electronics manufacturer told Reuters on Monday. The broader Topix was up 0.2 percent at 1,595.10 and the JPX-Nikkei Index 400 added 0.2 percent to 14,201.85.