Monday, December 6

Japan stocks end lower as dour earnings hit construction firms


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TOKYO — Japanese shares closed lower on Monday as construction stocks weakened on some downbeat earnings, while drugmakers lost their footing after Pfizer’s COVID-19 antiviral pill showed promising efficacy in a trial.

The Nikkei share average fell 0.35% to 29,507.05, despite Wall Street finishing strong on Friday, slipping from a one-month high hit on Thursday. The broader Topix ended 0.30% lower at 2,035.22.

With Japanese corporate earnings season in full swing this week, investors were hesitant to buy near the Nikkei’s psychological resistance at 30,000.

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Obayashi Corp dropped 9.2% after the builder slashed its guidance sharply, hit in part by rising costs, while rival Shimizu Corp shed 7.7% on disappointing earnings.

As a result, the construction sector fell 1.9%.

Drugmaker Shionogi lost 5.7% and Chugai Pharmaceutical declined 3.7% after rival Pfizer said its experimental pill cut by 89% the chance of hospitalization or death from COVID-19.

Mixi sank by its daily limit, losing 18.2% after the internet firm cut its earnings guidance sharply on poor sales of its main game service.

On the other hand, endoscope maker Olympus jumped 6.0% on bumper earnings results, while Sega Sammy rose 7.8% after the game company reported strong profits and announced a share buyback.

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Total net profits from Japanese companies that have so far announced results have beaten consensus estimates, on average, by 12%, said Nobuhiko Kuramochi, market strategist at Mizuho Securities.

“But overall they aren’t that impressive. And forward earnings expectations have been almost flat in the past month,” he said.

Airlines and train operators gained on news of Pfizer’s COVID-19 drug, as it added to hopes of economic recovery amid a fall in infections at home.

More than 1,500 companies are scheduled to announce quarterly results this week, including SoftBank Group on Monday, Nissan Motor on Tuesday and Tokyo Electron on Friday. (Reporting by Hideyuki Sano; Editing by Rashmi Aich and Ramakrishnan M.)

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financialpost.com