Japan’s Nikkei slips from record high on profit booking

TOKYO: Japan’s Nikkei share average slipped from a record high on Tuesday, as investors locked in profits after a fast-paced rally and declines in scandal-hit motor maker Nidec weighed on the market.

As of 0041 GMT, the Nikkei lost 0.4% to 50,318.56. The broader Topix fell 0.48% to 3,309.22.

“Investors wanted to book profits today, but the decline was small relative to the sharp gains in the previous session,” said Kazuaki Shimada, chief strategist at IwaiCosmo Securities.

“The market is overshot… and we see some technical indicators that signal the overshooting, but the momentum is so strong that those indicators are unreliable at the moment.”

The Nikkei rose 2.46% to close above the 50,000 level for the first time ever on Monday, continuing a run of successive records on expectations of sizeable spending from the nation’s new prime minister Sanae Takaichi.

On the day, Nidec plunged 19.45% to its daily limit low, after the Tokyo Stock Exchange (TSE) put the precision motor maker on alert for possible delisting.

The company will be expelled from its blue-chip index following a deepening accounting scandal, publisher Nikkei added. Pulling the index further lower, chip-testing equipment maker Advantest fell 1.13% and Uniqlo-brand owner Fast Retailing lost 1.25%.

On the other hand, technology investor SoftBank Group rose 2.43% to be the biggest support for the Nikkei. Chip-making equipment maker Tokyo Electron rose 1.08%.

Optimism around growth and capital expenditures related to US artificial intelligence continues to support investor sentiment, Shimada said, adding that the market is hopeful about the prospects of a US-China trade deal.

Of the more than 1,600 stocks trading on the TSE’s prime market, 12% rose, 84% fell and 2% were flat.