INSUBCONTINENT EXCLUSIVE:
TOKYO: Japan's Nikkei share average dropped on Wednesday after higher oil prices hurt rubber products makers, airlines and shippers, while
companies' going ex-dividend added to the market's broader weakness.
Yet the market came off early lows which traders suspected was linked
to Bank of Japan's buying of exchange-traded funds.
The benchmark Nikkei closed down 0.3 per cent at 22,271.77, while the broader Topix
eked out tiny gains of 0.02 per cent to finish at 1,731.45.
Companies whose business years end in December will go ex-dividend on Wednesday,
after which investors will no longer qualify for the latest dividend payout.
Market participants estimated the effect of the resulting
adjustment to prices would take 30 points off the Nikkei benchmark index.
Among Nikkei companies going ex-dividend on Wednesday are Japan
Tobacco, Canon and Bridgestone which stumbled 3.9 per cent , 3.0 per cent and 3.0 per cent , respectively.
Analysts said that investors
remain cautious against spiralling global trade tensions between the United States and its trade partners, which has dented the market in
the past week.
"We saw some short-covering on value stocks the day before, but the market is still risk averse," said Takuya Takahashi, a
strategist at Daiwa Securities.
He added that while higher oil prices somewhat helped US stocks overnight, more companies in the Japanese
market were vulnerable to the impact of rising oil prices.
Shares in the rubber products, airline sectors and sea transport, underperformed
and tumbled 2.7 per cent, 1.4 per cent and 1.0 per cent , respectively, on worries about rising costs.
Oil prices rose on Wednesday
following supply disruptions in Libya and Canada and after US officials told oil importers to stop buying Iranian crude from November.
Chief
Cabinet Secretary Yoshihide Suga told a news conference on Wednesday that Japan was closely analysing the impact of US sanctions on Iran and
would continue to talk with Washington and relevant nations so that Japanese firms would not be adversely affected.
Bucking the overall
weakness, Idemitsu Kosan and Showa Shell Sekiyu soared after the Nikkei business daily reported Idemitsu's founding family has agreed to
plans for a merger with Showa Shell.
Idemitsu Kosan and Showa Shell climbed 13.6 per cent and 8.5 per cent, respectively.
Oracle Corp Japan
jumped 12.3 per cent after the company's parent net profit rose 6.6 per cent on year to 38.7 billion yen for the fiscal year ended in
