Photographer: David Paul Morris/Bloomberg

Apple Suppliers Drop, Outweighing Insurer Rally in Tokyo Stocks

  • Gauge of electronics makers weighs most on Topix index
  • Insurers’ gauge lead gains after U.S. yields rise, UBS upgrade

The rout in U.S. technology stocks Friday spilled over to Japan, with a host of electronics companies and Apple Inc. suppliers weighing on the broader market Monday. Financial shares outperformed on higher U.S. Treasury yields, leaving the Topix index little changed.

The Topix swung between a loss of 0.3 percent and a gain of 0.3 percent as Murata Manufacturing Co. and Sony Corp. paced a 1 percent drop in a gauge of electronics makers, while insurers rallied. The Nikkei 225 Stock Average slid 0.5 percent with technology stocks accounting for eight of the 10 worst performers. Declines in Fast Retailing Co. and SoftBank Group Corp. accounted for over 70 points of the stock average’s 105-point drop.

“There’s a chance U.S. internet technology stocks that have propelled a global stock rally will now serve as a buzzkill,” said Mitsuo Shimizu, deputy general manager at Japan Asia Securities in Tokyo. “Because anticipation over Apple’s new iPhone had boosted related chip and electronics company shares, it’ll likely be a minus for these stocks too.”

The S&P 500’s technology index slumped 2.7 percent Friday after Goldman Sachs Group Inc. analysts by Robert Boroujerdi warned low volatility in select technology giants including Alphabet Inc. and Apple Inc. may be blinding investors to risks.

Financial stocks bucked Monday’s trend in Tokyo, with insurers leading gains on the Topix after UBS analyst Shinichi Ina wrote in a note to clients that valuations for the companies are “no longer looking demanding.” Insurance stocks rose excessively following the U.S. presidential election in anticipation of higher long-term yields, but these expectations have moderated, Ina wrote.

Summary

  • Topix little changed at 1,591.55 at close in Tokyo
  • Nikkei 225 -0.5% at 19,908.58
  • Yen +0.1% at 110.20 per dollar
  • Major Apple suppliers slide, with Murata Manufacturing -2.6%, Alps Electric -3.2%, TDK -2% and Minebea Mitsumi -1.9%; Mizuho Securities downgrades Apple to neutral, saying potentially strong product cycle is priced in
  • Keyence -2.3%, Sony -1.2%, Nidec -1.3%
  • Financial shares outperform: Mizuho Financial Group +0.5%, insurers T&D +2.9% and Dai-ichi Life +1.7%
  • Totenko +6.7% after news of a panda being born in a zoo near where co. operates a Chinese restaurant
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