Nikkei ends at over 1-week low; Socionext weighs after top shareholders exit

TOKYO: Japan’s Nikkei share average closed at a more than one-week low on Thursday, dragged down by chip-related firms as Socionext fell to its daily lower limit, after its biggest shareholders sold their entire stake in the fast-growing chip-design company.

The Nikkei dropped 1.7% to close at 32,773.02, its lowest close since June 27, after posting its sharpest daily drop since June 7.

The broader Topix lost 1.26% to 2,277.08.

Japan’s Nikkei slips as investors lock in profits, Fast Retailing drags

Socionext’s shares tanked 22.78% after shares were untraded most of the session, following the announcement that its top shareholders, including Panasonic Holdings and Development Bank of Japan, would sell their entire stake worth 280 billion yen ($1.94 billion).

Socionext, which went public in October last year, surged nearly 200% this year, becoming one of the icons for chip-related shares that helped the Nikkei to reach a 33-year high.

“News on the sale of Socionext shares sent U.S. technology stocks down overnight, which pushed leading Japanese chip shares lower today,” said Shigetoshi Kamada, general manager - research, Tachibana Securities.

“Socionext was among shares global investors bought to catch up the rally in t7he Nikkei.”

Wall Street’s main indexes ended slightly lower overnight, with the Philadelphia SE Semiconductor Index dropping 2.2%, while Intel slipped 3.3% and Texas Instruments declined 1.8%.

In Japan, chip-making equipment maker Tokyo Electron lost 3.92% and chip-testing equipment maker Advantest lost 1.84%, while chip-maker Renesas Electronics fell 4.16%.

Sentiment was also weakened by asset managers selling shares worth more than 1 trillion yen in exchange traded funds ahead of their dividend distribution dates through the beginning of next week, said Shoichi Arisawa, general manager – investment research, IwaiCosmo Securities.

All but two out of the Tokyo Stock Exchange’s 33 industry sub-indxes fell. Energy explorers rose 0.21% and airlines inched up 0.08%.