Tokyo shares fall 0.11pc

TOKYO: Tokyo shares fell 0.11 percent Thursday, with power utilities under pressure as a government plan for nuclear plant "stress tests" looked set to keep idled reactors offline longer.

The headline Nikkei-225 index at the Tokyo Stock Exchange fell 11.34 points to 10,071.14, after closing Wednesday at its highest level since the March 11 earthquake and tsunami devastated the northeast coast.

The Topix index sagged 0.35 percent or 3.03 points to 870.48.

Utilities led the market's fall after the government said Wednesday it will run "stress tests" on all the nation's atomic reactors amid the ongoing nuclear crisis sparked by the March disaster.

Uncertainties resurfaced as the government was seen to be changing course, having earlier declared all plants safe, said Kazuhiro Takahashi, general manager of investment strategy and research at Daiwa Securities.

Kyushu Electric Power plunged 7.53 percent to 1,349 yen and Kansai Electric Power dropped 8.39 percent to 1,452 yen.

But the decline in the overall market proved limited and the Nikkei briefly turned into positive territory.

"Investors are reluctant to take a firm position ahead of Friday's US employment data," said Hideyuki Ishiguro, a strategist at Okasan Securities.

"The Nikkei is approaching its pre-quake level, indicating that the market has priced in a healthy recovery in Japanese corporate profits for the upcoming earnings season," Ishiguro added.

China's central bank said Wednesday it would raise its benchmark deposit and lending rates by 25 basis points, the third rate hike this year and the latest effort aimed at curbing inflation.

The rate hike, which came slightly earlier than expected, led to selling of some China-linked shares, Takahashi said. Among them were machinery makers Fanuc, down 1.26 percent at 14,070 yen, and Komatsu, down 1.81 percent at 2,544 yen.

US stocks rose on Wednesday, with the Dow Jones Industrial Average closing up 0.45 percent, shrugging off the Chinese rate hike and eurozone debt worries.

The market saw little impact from government data showing core private-sector machinery orders, a leading indicator of corporate capital spending, rose 3.0 percent in May from the previous month.

Copyright AFP (Agence France-Presse), 2011