Topix Falls After 3-Day Rally as Investors Mull Earnings

Japanese stocks fell after the Topix index’s biggest three-day advance in seven months as U.S. shares dropped the first time in five days and investors weighed corporate earnings.

Asahi Group Holdings Ltd. slumped 4.5 percent after Japan’s second-largest beermaker’s net-income forecast for this year missed estimates. Tokyo Tatemono Co. led declines on the Nikkei 225 Stock Average after the property company predicted full-year operating profit below analyst expectations. Mixi Inc. added 3.8 percent after the social-gaming networking site boosted its outlook.

The Topix slid 1.6 percent to 1,199.74 at the close in Tokyo. More than six shares fell for each that rose. The gauge climbed 4.9 percent over the previous three days, the largest such advance since July. The Nikkei 225 Stock Average sank 1.8 percent today to 14,534.74. The Standard & Poor’s 500 Index fell less than 0.1 percent yesterday after a four-day rally.

“The market is correcting,” said Takahiro Nakano, a Tokyo-based senior strategist at Mizuho Trust & Banking Co. “If you look at earnings, you don’t see catalysts that will take shares a lot higher from here.”

Of the 261 companies on the Topix that reported quarterly earnings from the beginning of January through yesterday and for which estimates are available, 66 percent beat analysts’ profit estimates, according to data compiled by Bloomberg.

Asahi Falls

Asahi Group slid 4.5 percent to 2,692 yen. Net income will probably rise 8.5 percent to 67 billion yen ($656 million) this year, the brewer said yesterday. That compares with the 77.4 billion yen average of 14 analyst estimates compiled by Bloomberg. Demand for beer is shrinking in Japan, where the population is falling and the economy is expected to slump after the sales tax rises to 8 percent in April from 5 percent.

Tokyo Tatemono, which develops, sells and leases commercial buildings and housing, plunged 8.3 percent to 869 yen, the biggest decline since May. The company projected full-year operating profit of 27 billion yen missing analysts’ estimates.

Sumitomo Realty & Development Co. declined 2.4 percent to 4,415 yen, also the biggest drop since May, after keeping its full-year net-income forecast unchanged at 68 billion yen. The stock fell even after the company’s nine-month profit rose 25 percent from the same period of the previous year as it sold more homes.

Mixi advanced 3.8 percent to 5,240 yen. The online gaming company revised its operating profit forecast to 200 million yen after earlier projecting a 1.6 billion yen loss, citing sales of its “Monster Strike” app.

China Exports

Futures on the S&P 500 tumbled 0.5 percent today. The U.S. equity measure fell yesterday as declines in companies from Procter & Gamble Co. to Inc. overshadowed optimism about economic growth.

The Chinese government is targeting export growth of about 7.5 percent in 2014, three people with direct knowledge of the matter said, setting sights lower than last year’s pace.

The Nikkei 225 has plummeted 11 percent this year after capping the biggest yearly gain in four decades in 2013. Takeda Pharmaceutical Co., Japan’s largest drugmaker, is the most popular stock in the first weeks of a tax-free investment program as buyers favor less-volatile shares amid the biggest equity slump among developed markets.

Holders of Nippon Individual Savings Accounts bought more stock in Takeda than any other Japanese company this year through Feb. 7, according to online brokerages SBI Securities Co., Rakuten Securities Inc. and Matsui Securities Co. Takeda slid 1.4 percent today to 4,719 yen.

Nomura Real Estate Office Fund Inc. fell 2.8 percent to 417,000 yen as MSCI Inc. said it will drop the stock from its global gauge for developed shares. Seiko Epson Corp. will be added to the MSCI World Index after the close on Feb. 28, the index compiler said in a statement. The company, which makes watches and scanners, added 0.5 percent to 3,095 yen.

The Topix traded at 1.19 times book value today, compared with 2.58 for the S&P 500 and 1.85 for the Stoxx Europe 600 Index yesterday.

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