Nikkei falls on weaker U.S. shares; market awaits China data

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Published: July 24, 2015 9:22:22 AM

Japan's Nikkei share average fell on Friday morning after dismal corporate earnings on Wall Street, while some investors hugged the sidelines ahead of key Chinese economic data due out later in the day.

Japan’s Nikkei share average fell on Friday morning after dismal corporate earnings on Wall Street, while some investors hugged the sidelines ahead of key Chinese economic data due out later in the day.

The Nikkei share average rose 0.4 percent to 20,609.62 in midmorning trade. For the week, the index has shed 0.2 percent so far.

U.S. shares fell after the likes of 3M, American Express and Caterpillar disappointed the market with weaker-than-expected earnings.
Sentiment in the Japanese market should depend on the Markit Flash China Manufacturing Purchasing Managers’ Index (PMI), which will provide the latest clue to the health of the world’s second-largest economy, analysts said.

The data is due out 0145 GMT.

The Chinese stock market rout that wiped out as much as $4 trillion in share values at one point has rattled investor confidence. Some investors are concerned the market meltdown could hurt the economy, analysts said.

“Although the result may have little impact to the whole Japanese market, companies which have big exposure to China such as Fanuc Corp may be hit if the data is worse than expected,” said Takuya Takahashi, a strategist at Daiwa Securities. “The market’s mood will likely depend on the data today.”

On Friday, construction equipment makers underperformed due to Caterpillar’s sales declines in key markets. Komatsu  fell 1.6 percent and Hitachi Construction Machinery  shed 1.4 percent.

Bucking the trend, Shin-Etsu Chemical jumped 4.1 percent after reporting strong April-to-June results and raising dividend forecasts to 110 yen per share from the previous year’s 100 yen per share for the year ending March 2016.

Major exporters were mixed, with Toyota Motor Corp  flat, Nissan Motor Co gaining 0.4 percent and Panasonic Corp dropping 0.2 percent.

The broader Topix fell 0.3 percent to 1,660.58 and the JPX-Nikkei Index 400 declined 0.3 percent to 14,973.34.

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