Nikkei closes lower after hitting 23,000 for first time since ’92

Stocks ended with losses on the Tokyo Stock Exchange on Thursday as a wave of selling hit following the benchmark Nikkei average’s first visit to 23,000 in some 26 years.

The 225-issue Nikkei lost 45.11 points, or 0.20 percent, to finish at 22,868.71, after falling 23.78 points Wednesday.

The Topix index of all first-section issues dropped 4.49 points, or 0.25 percent, to close at 1,813.11. The tech-heavy index rose 4.31 points the previous day.

After getting off to a firmer start with buybacks of issues battered on Wednesday, the market gathered enough steam to push the Nikkei average through the 23,000 line on an intraday basis for the first time since Jan. 10, 1992. It was up nearly 470 points by the morning close.

The upsurge reflected hefty purchases by foreign investors, who took heart from recently brisk Japanese earnings, brokers said.

In midafternoon trading, however, stocks lost momentum on selling to lock in profits and quickly sank deep into negative territory toward the day’s close.

In the sell-off phase, the Nikkei average briefly gave up over 390 points but recovered much of its losses thanks to buying on dips, brokers said.

Stocks soared “like a kite without a thread” during the morning session, said Chihiro Ota, general manager for investment research and investor services at SMBC Nikko Securities Inc.

Behind foreign players’ active buying was “a sense of urgency” to hold high performers, Ota said.

“Stock prices rose too much without major buying incentives,” said Hideyuki Suzuki, head of the investment market research department at SBI Securities Co.

An official at a midsize brokerage house said the market tumbled on selling to unwind arbitrage positions with stock index futures, which met with successive large-lot selling in the afternoon.

Investors “hastily sold stocks after seeing prices start going down,” Suzuki added.

Falling issues outnumbered rising ones 1,111 to 858 in the TSE’s first section, while 65 issues were unchanged.

Volume swelled to 2.7 billion shares from Wednesday’s 1.8 billion.

Scandal-hit Nissan lost 2.01 percent following the automaker’s downward revision Wednesday to its estimate for operating profit for the year through next March.

Among other major losers were Japan Display and electronics retailer Yamada Denki.

By contrast, food maker Meiji Holdings rose 5.36 percent thanks to its stronger-than-expected operating profit for the April-September half, brokers said.

Also on the plus side were oil company Inpex and department store operator J. Front Retailing.

In index futures trading on the Osaka Exchange, the key December contract on the Nikkei average fell 40 points to close at 22,900.

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