Japan Nikkei trades lower on profit-taking

Headline indices of the Japan share market were down on Tuesday, 05 March 2019, as investors opted to take profits on following the negative lead from Wall Street overnight after an unexpected fall in U.S. construction spending in December and after the Nikkei's three-month closing high a day earlier. Investor sentiment was also dampened by news that China lowered its economic growth target for 2019 to a range of 6-6.5% from the 2018 target of around 6.5% and unveiled huge tax cuts. Total 27 subsectors out of 33 subsectors of the Tokyo Stock Exchange inclined, with shares in Iron & Steel, Rubber Products, Metal Products, Transportation Equipment, Mining, and Machinery issues being notable losers. Around late afternoon, the 225-issue Nikkei Stock Average fell 103.35 points, or 0.47%, at 21,718.69. The broader Topix index of all First Section issues on the Tokyo Stock Exchange dropped 9.15 points, or 0.56%, at 1,618.44.

China-linked shares were among the losers as Beijing lowered its economic growth target to 6.0-6.5% for 2019. Construction machine maker Komatsu was down 0.7%, electronic parts maker Rohm off by 0.4%, and industrial robot maker Fanuc dipped 0.8%. Heavy machinery manufacturer IHI dipped 2.5% after it confirmed a report that unqualified workers had conducted quality checks for hundreds of engines for private jets.

 

On the economic front, the services sector in Japan continued to expand in February, and at a faster rate, the latest survey from Nikkei revealed on Tuesday with a services PMI score of 52.3. That's up from 51.6 in January and it moves further above the boom-or-bust line of 50 that separates expansion from contraction. The survey also showed that the composite index, which combines manufacturing and services data, fell to 50.7 from 50.9 in the previous month.

CURRENCY NEWS: The Japanese yen depreciated against the dollar in the upper 111 yen zone on Tuesday. The dollar fetched 111.91 yen in Asian trade, against 111.72 yen in New York late Monday.

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