Topix Caps Nine-Day Loss on Earnings Concern, Utilities

Japanese stocks fell, with the Topix Index capping its longest losing streak since July 2009, on concern the global economic slowdown will weigh on corporate earnings. Utilities plunged on amid renewed concern about nuclear safety.

Sumco Corp. (3436), a maker of silicon wafers for semiconductors, lost 4.8 percent after industry bellwether Intel Corp. forecast sales will miss estimates. Hokuriku Electric Power Co. and Kansai Electric Power Co. fell on a report regulators will request studies of fault lines running the utilities’ nuclear plants. Hulic Co. paced gains among real estate stocks after Nomura Holdings Inc. (8604) reported that condominium sales may pick up.

The Topix fell 0.4 percent to 740.46 at the 3 p.m. trading close in Tokyo, extending its losing streak to nine days. The Nikkei 225 Stock Average (NKY) lost 0.3 percent to 8,726.74 after rising as much as 0.5 percent. The gauge dropped after failing to break a resistance level, indicating the market’s lack of upward momentum, according to Okasan Securities Co.

“What’s behind the downward trend is global economic slowdown concern, with too many uncertain factors,” saidYoshihiro Ito, chief strategist at the online division of 89- year-old Okasan Securities. “Government regulators’ actions have been crashing utility shares.”

The Topix rebounded about 6 percent from a 29-year low on June 4 as concern eased about Europe’s debt crisis and central banks around the world cut interest rates to shore up growth.

Shares on the index are valued at 0.9 times book value, compared with 2.1 for the Standard & Poor’s 500 Index and 1.4 for the Europe Stoxx 600 Index. A number below one means investors can buy companies for less than the value of their assets.

Intel Outlook

Semiconductor-related stocks fell after Intel, the world’s largest chipmaker, cut its annual sales forecast yesterday amid slumping demand for computers in the U.S. and Europe. Sumco slid 4.8 percent to 581 yen. Advantest Corp. (6857), a maker of memory-chip testers, dropped 1.2 percent to 1,056 yen.

Power generators fell the most on the Topix after the Nikkei newspaper reported that regulators will ask two utilities to conduct geological studies after surveys showed that a fault under a Hokuriku Electric nuclear plant is probably active. Experts can’t rule out the possibility that a fault under Kansai Electric’s Ohi plant is active, according to the report.

Utilities Drop

Kansai Electric slid 6.3 percent to 758 yen. Hokuriku Electric plunged 21 percent to 877 yen, falling the most since at least 1974.

Among other stocks that declined, department-store operator Uny Co. plunged 9.9 percent to 815 yen after announcing a share sale to raise as much as 29.8 billion yen ($377 million).

Stocks rose earlier after U.S. Federal Reserve Chairman Ben S. Bernanke said the central bank is prepared to act to stimulate growth if the labor market doesn’t improve. The S&P 500 (SPXL1) closed 0.7 percent higher in New York yesterday after Bernanke’s remarks boosted optimism for further easing.

Exporters to the U.S. advanced. Nissan Motor Co., an automaker that gets almost a third of its sales in North America, added 1.9 percent to 713 yen. Canon Inc. (7751) rose 0.6 percent to 2,896 yen.

Property Stocks

Real estate shares gained after Nomura said condominium sales are expected to climb ahead of the consumption tax increase and as interest rates remain low. The number of condominiums put up for sale in Tokyo rose 16 percent in June from a year earlier, the Real Estate Economic Research Institute Co. reported today.

Hulic Co. jumped 6.1 percent to 401 yen, while Tokyo Tatemono Co. rose 1.4 percent to 286 yen.

The Nikkei 225 Volatility Index (VNKY) declined 1 percent to 18.56, indicating traders expect a swing of about 5.3 percent on the benchmark gauge over the next 30 days. Trading volume on the Nikkei was 2 percent above the 30-day average.

To contact the reporter on this story: Yoshiaki Nohara in Tokyo at ynohara1@bloomberg.net

To contact the editor responsible for this story: Nick Gentle at ngentle2@bloomberg.net.

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