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Tech sector leads Nikkei to 10-month high, profit-taking hits Topix

Published 18/10/2019, 08:18
© Reuters.  Tech sector leads Nikkei to 10-month high, profit-taking hits Topix
JP225
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TOPX
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4063
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2282
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7735
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9009
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4911
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3436
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6954
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9983
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2330
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6861
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6981
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* Nikkei up 0.18% but broader Topix shed 0.13%

* NT ratio at highest since 1992

* Semiconductor-related shares jump after TSMC earnings

By Hideyuki Sano

TOKYO, Oct 18 (Reuters) - Japan's Nikkei hit a 10-month high

on Friday after high-tech companies jumped on upbeat earnings

from Taiwan's TSMC while the broader market ended lower,

succumbing to profit-taking after weaker-than-expected Chinese

GDP data.

The Nikkei share average .N225 rose 0.18% to 22,492.68,

its highest finish since early December last year, pulling back

from rising as much as 0.88% earlier. For the week, the Nikkei

was up 3.18%.

The broader Topix .TOPX , a gauge of all firms on the main

board of the Tokyo Stock Exchange, ended 0.13% lower at

1,621.99.

Their divergent performances lifted the so-called NT ratio

.NTIDX , of the two indexes, to the highest since 1992.

The Nikkei was buoyed by a rise in heavyweight Fast

Retailing 9983.T as well as a few heavily-weighted tech

shares, including Fanuc 6954.T , Shin-etsu Chemical 4063.T

and Omron 6645.T .

The tech sector led gains after Taiwan Semiconductor

Manufacturing Co (TSMC) 2330.TW - the world's top contract

chipmaker - raised on Thursday its 2019 capital spending plan by

up to $5 billion and forecast a nearly 10% rise in

fourth-quarter revenue on strong demand for faster mobile chips

and new high-end smartphones.

Screen Holdings 7735.T , a major chip industry supplier,

gained 7.9% with trade volume reaching almost three times the

average while Sumco 3436.T rose 4.3%.

Tri Chemical Laboratories 4369.T , maker of high-purity

chemicals for semiconductor manufacturing, jumped 6.8%.

Among bigger firms, Murata Manufacturing 6981.T gained

1.2%, and Keyence 6861.T rose 1.0%.

While the market got an early boost from relief over Britain

and the European Union striking a deal on the UK's departure

from the bloc, soft Chinese GDP triggered profit-taking.

China's third-quarter economic growth slowed more than

expected to 6.0%, its weakest pace in almost three decades.

Still, overall sentiment remained positive as U.S. corporate

earnings have so far mostly beat market expectations. .N

That also raised some hopes that Japanese companies'

earnings outlook could bottom out soon. The Topix's forward

earnings per share (EPS) has declined 9% to 122.86 since peaking

in November.

At home, investor sentiment also benefited from a trade deal

reached between Japan and the United States which the Japanese

government said would likely boost the domestic economy by about

0.8%. Despite the small losses in Topix, advancers slightly

outnumbered decliners by a ratio of roughly 21 to 20.

Defensive shares, such as food companies, were among the

worst performers as investors moved out of them to more cyclical

shares.

NH Foods 2282.T dropped 2.4%, cosmetic firm Shiseido

4911.T declined 3.1% and Keisei Electric Railway 9009.T fell

2.1%.

(Editing by Jacqueline Wong)

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