Nikkei slips as euro zone leaders bicker

By Sophie Knight
TOKYO, June 29 (Reuters) - Japan's Nikkei share average
dipped in early trade on Friday after the first day of an EU
summit was marred by disagreement over measures to tackle the
euro zone debt crisis, and risk appetite waned after Thursday's
robust gains.
The Nikkei slipped 0.4 percent to 8,842.51, leaving it 12.3
percent down so far in the second quarter, which ends later on
Friday, wiping out much of the first-quarter's 19.3 percent
surge, the biggest first-quarter gain in 24 years.
Nearly all sectors suffered shallow losses, but the
securities sector bucked the trend, driven up 1.8
percent by Nomura Holding Inc's 3.2 percent gain on measures to
resolve an insider trading scandal.
"We're likely to see the Nikkei open weak but return to
positive territory later in the day on short-covering," said
Masayuki Doshida, senior market analyst at Rakuten Securities,
adding that the market had already priced in an inconclusive end
to the EU summit.
"But if they don't even agree on the details of the Spanish
bank bailout and hint that the ECB will drop rates, there will
be disappointment," he said.
Euro zone leaders are to conclude the two-day meeting later
on Friday to discuss how to tackle an expanding debt zone
crisis. On Thursday, Italian and Spanish leaders refused to sign
a growth package until Germany agreed to a short-term plan to
reduce the cost of their credit.
Investors welcomed news that Nomura Holdings Inc
could halt some operations and slash top executives pay, as it
attempts to solve an insider trading scandal, according to
sources. A management committee is to meet later on Friday to
discuss the changes. ID:nL3E8HS4HE]
Nissan Motor Co Ltd slipped 0.7 percent after Nomura
Securities cut its earnings forecasts for the automaker and
lowered its price target to 1,050 yen from 1,200, citing a
strong yen and the startup costs for the Altima model in the
United States.
Hard drive makers sold off after U.S. manufacturer
Hutchinson Technology dropped 12 percent due to
disappointing third quarter results and Seagate Technology Plc
was downgraded on weakening demand.
TDK Corporation shed 4.2 percent to an eight-month
low as the second-most traded stock by turnover on the main
board, while Nidec Corp lost 1
percent.
Suzuki Motor Corp gained 1.9 percent after
announcing that it is planning to increase its capital
expenditure by over 60 percent, spending an average of 200
billion yen ($2.5 billion) through 2016, according to the Nikkei
business daily.
The broader Topix was flat after starting the morning lower,
and some market players expected the Nikkei to swing into
positive territory as investors indulge in "window dressing" as
the month and second quarter draw to a close. The same factors
buoyed the index to a 1.7 percent gain on Thursday.
However, trading has been thin recently, making the index's
gains less significant. Some market players fear it could suffer
a reversal in early July as concerns about slowing global growth
and the intractable euro zone crisis creep back in.
"Investors are feeling pessimistic about next month's IMF
world economic outlook figures, which will likely paint a pretty
dim picture," said Fujio Ando, managing director of Chibagin
Asset Management. "However, Japan's growth forecast is likely to
be revised upwards, and second quarter domestic results will
look good compared to last year's post-quake period."