TOKYO -- High-tech shares took a beating despite news overnight that
second-quarter earnings at
Yahoo!
(YHOO)
beat analyst's expectations as interest-rate jitters and the settlement of options and futures contracts on Friday hurt sentiment in Tokyo today.
In addition, key tech stocks, including
Softbank
, which owns 22.58% of Yahoo!, fell as investors tried to cut the losses they amassed six months ago when they bought Softbank shares on margin, traders said.
The
Nikkei 225
index shed 162.23 to 17,342.13, while the
Topix
index, which includes all shares listed on the
Tokyo Stock Exchange's
first section, lost 6.56 to 1604.40. The
Jasdaq
small-cap index dipped 1.44, or 1.6%, to 86.23, while the Nikkei
over-the-counter
index fell 8.81 to 1784.16.
Trading was slow with the
Bank of Japan's
policy board meeting coming up on Monday, where bankers are expected to resume the heated debate over whether to abolish Japan's zero interest rate policy or not.. In addition, Nikkei 225 futures got hit by a large lot sale in the middle of the day, which dragged the cash market lower as well. The sale was pegged to position adjustments ahead of Friday's options settlement.
The sole, but large, incentive to trade higher was the earnings news about Yahoo! but investors who had bought large-cap tech shares on margin at the top of the year were scrambling to shed their positions to cut any more losses. Traders said there were many investors who were hurting since buying Softbank at its February peak of 66,000 yen ($615.90). Softbank dropped 480 yen, or 4.0%, to 11,630 ($108.53) today, while
Yahoo! Japan
lost 3.4 million, or 9.1%, to 33.8 million.
Other tech names also dipped lower, including
Sony
(SNE) - Get Report
, down 80 to 10,820, and
Fujitsu
, down 80, or 2.3%, to 3370.
After poisoning more than 14,000 people with tainted milk,
Snow Brand Milk Products
shed 24, or 5.9%, to 382. The firm said it would voluntarily shut down 21 milk processing plants to check on faulty machinery and to conduct a thorough cleaning.
With rumors that
Standard & Poor's
may be ready to cut Japan's sovereign debt rating, the greenback edged slightly higher to 107.16 yen. The talk started when dealers got ahead of themselves after hearing S&P intended to hold a press conference on the general state of affairs, but the topic of sovereign debt did not come up.
Hong Kong's
Hang Seng
index edged up 192.60, or 1.1%, to 17,552.26 largely on the back of huge gains in index heavyweight
Hutchison Whampoa
. Shares climbed HK$5.00, or 4.5%, to 115.50 ($14.82) as traders got excited over the likelihood that the firm would announce it was selling a stake in its U.K. mobile phone unit to Japan's
NTT DoCoMo
and Dutch
KPN
today. In addition, Hutchison owns 23% of
VoiceStream Wireless
(VSTR)
, which was written up by the press yesterday as a possible
buy-out candidate for Germany's
Deutsche Telekom
(DT) - Get Report
.
With the ongoing bankers' strike not seriously affecting daily business in Seoul, Korea's
Kospi
index rose 2.90 to 839.76, while Taiwan's
TWSE
index dropped 98.88, or 1.2%, to 8059.75.
