Nikkei 225 Falls From Seven-Month High; Utilities Climb

The Nikkei 225 Stock Average (NKY) fell from a seven-month high after a technical indicator signaled the market may be overheating. Losses were limited as utilities rose on prospects for a restart of nuclear reactors this summer.

Softbank Corp. (9984) and KDDI Inc. led declines on the Nikkei 225 after the Nikkei newspaper reported rival NTT DoCoMo Inc. may start offering the iPhone. Tokyo Electric Power Co. soared 13 percent to lead gains on the Nikkei 225. Sharp Corp. jumped 8.5 percent, extending its four-day gain to 26 percent after announcing a capital alliance with Qualcomm Inc.

The Nikkei 225 slid 0.2 percent to 9,527.39 at the 3 p.m. close in Tokyo after rising as much as 0.3 percent. The gauge gained 0.9 percent this week, its fourth weekly gain. The Topix Index rose 0.2 percent to 790.24, with about eight stocks falling for every six that gained.

“With the upcoming elections the measure has risen quite a bit, so there’s also some profit-taking going on,” said Soichiro Monji, chief strategist at Tokyo-based Daiwa SB Investments Ltd., which manages the equivalent of about 5 trillion yen ($61 billion). “If the utilities can restart their nuclear reactors by summer, that’s definitely positive for them.”

Futures on the Standard & Poor’s 500 Index rose less than 0.1 percent today. The gauge gained 0.3 yesterday as Apple Inc. rebounded from its biggest drop in four years and investors weighed prospects for a budget deal in Washington.

Value of Assets

The Topix traded at 0.9 times book value today, compared with 2.1 for the Standard & Poor’s 500 Index and 1.5 for the Europe Stoxx 600 Index. A number less than one means that companies can be bought for less than the value of their assets.

The benchmark Nikkei 225 traded at its highest level since April 26 yesterday, with its relative strength index at over 70. Some investors view a reading above 70 as a signal the gauge is overbought.

“There’s definitely a sense the market is overheating,” said Daiwa SB’s Monji. “But the Nikkei is doing well despite the profit-taking.”

Softbank and KDDI Corp. (9433), both iPhone sellers, fell 2.1 percent to 3,005 yen and 3 percent to 5,880 yen, respectively. NTT DoCoMo advanced 3.5 percent to 122,300 yen. The carrier may start selling the iPhone after its number of mobile subscribers declined for the first time in five years in November, the Nikkei reported.

Utilities rose 2.9 percent as a group today, the biggest gain among the Topix’s 33 industry groups. The Nuclear Regulation Authority Secretariat may start safety checks on nuclear reactors this spring and some may be restarted in the summer, Kyodo News reported, without saying who it got the information from.

Utilities Advance

Tokyo Electric Power jumped 13 percent to 149 yen, the biggest gain on the Nikkei 225. (NKY) Kansai Electric Power Co. advanced 4.5 percent to 793 yen. Chubu Electric Power Co., which supplies electricity in the central Japan region, gained 5.9 percent to 1,120 yen.

Sharp jumped 8.5 percent to 216 yen, the second-biggest gain on the Nikkei 225. The stock has risen four days since the television maker said on Dec. 4 it will sell shares to Qualcomm Inc. for a partnership to develop displays.

The Nikkei Stock Average Volatility Index lost 2.6 percent to 16.94 today, indicating traders expect a swing of about 4.9 percent on the benchmark gauge over the next 30 days.

To contact the reporters on this story: Anna Kitanaka in Tokyo at akitanaka@bloomberg.net; Satoshi Kawano in Tokyo at skawano1@bloomberg.net

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

Bloomberg reserves the right to edit or remove comments but is under no obligation to do so, or to explain individual moderation decisions.

Please enable JavaScript to view the comments powered by Disqus.