Japan’s Topix Little Changed as Investors Weigh Company Earnings

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Japan’s Topix index closed little changed, after three days of gains, as investors weighed earnings.

Nippon Sheet Glass Co. tumbled 8.6 percent on earnings that SMBC Nikko Securities Inc. called “slightly negative.” Toyota Tsusho Corp. dropped 5.8 percent after the trading company reported a drop in profit. Suzuki Motor Corp. gained 3.4 percent after the hedge fund of activist investor Daniel Loeb said it took a stake in the carmaker. Honda Motor Co. jumped 8.8 percent after reporting profit that beat estimates.

The Topix closed at 1,659.60 in Tokyo, with fewer than nine shares rising for every eight that fell. The Nikkei 225 Stock Average slipped 0.2 percent to 20,548.11. More than 70 companies in the Topix report quarterly results Monday.

“In general, the view is that once we enter August the market will be weaker, entering into a summer slump,” Shoji Hirakawa, chief equity strategist at Okasan Securities Co. in Tokyo said by phone. “The consensus is bearish. That said, considering corporate earnings, it wouldn’t be surprising if shares kept rising.”

Of the Topix firms that have reported results this season and for which estimates are available, 62 percent exceeded profit expectations, an improvement from the 48 percent that beat forecasts in the previous quarter, according to data compiled by Bloomberg.

Oil Drops

Energy explorers and oil refiners declined as crude futures in New York slid as much as 1.6 percent, after capping a 21 percent drop in July on Friday, following a claim by Iran that it will be able to bolster production a week after sanctions are lifted.

Oil explorer Inpex Corp. lost 2 percent, while Japan Drilling Co. slumped 1.6 percent.

E-mini futures on the Standard & Poor’s 500 Index lost 0.2 percent after the underlying measure slipped 0.2 percent on Friday in New York.

An official gauge of Chinese manufacturing at the weekend slid to a five-month low. Chinese stocks sank the most since 2009 in July as regulators struggled to stave off an equity rout amid weakening growth in the world’s second-largest economy. Greek markets are set to resume following a five-week suspension.

Corporate Earnings

Nippon Sheet Glass dropped 8.6 percent, its biggest loss since May 2013. The glassmaker posted operating profit of 3.11 billion yen in the first quarter, missing the 5.3 billion yen estimate by analysts. While demand for liquid-crystal display glass is growing, it’s difficult to be optimistic about the future given increasing competition, SMBC Nikko analyst Hiroyuki Okaseri wrote in a report.

Toyota Tsusho lost 5.8 percent for its steepest decline since July 2013. Net income fell 39 percent on the year to about 13 billion yen in the first quarter, the company said.

Suzuki Motor added 3.4 percent to close at a record. Loeb’s Third Point LLC said it acquired a stake in the carmaker. Suzuki’s assets in India are worth more than the entire company’s market capitalization, Third Point said in a letter to investors dated July 31.

Honda added 8.8 percent, the biggest gain on the Nikkei 225. Profit rose to 186 billion yen in the quarter ended June, beating estimates for 138.6 billion.

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