* Nikkei stays below major support lines * Nikkei may hit 8,500 before it picks up - analyst By Ayai Tomisawa TOKYO, Nov 9 Japan's Nikkei share average fell 1 percent on Friday, extending declines into a fifth day on investor caution about U.S. fiscal woes and discouraging developments in Europe that have sent the yen climbing against the dollar and the euro. The re-emergence of macro-economic concerns comes amid a weak quarterly earnings season that has seen many companies cut their annual guidance. "Investors were overly optimistic that they had thought that the market would price in the U.S. election result and would buy Japanese stocks whose valuations are cheap," said Masatoshi Sato, a senior strategist at Mizuho Investors Securities. "It's too early to price in all the negative factors. The market may not pick up unless the index hits bottom around a psychological support level of 8,500." Key concerns for investors include the U.S. fiscal cliff - $600 billion in spending cuts and tax increases due to take effect early next year, as well as few signs of progress in Europe's debt crisis. The euro is trading near one-month lows against the yen, under pressure after ECB President Mario Draghi said the euro zone economy showed little sign of recovering before the year-end despite easing financial market conditions. In early trade, the Nikkei dropped 1.1 percent to 8,739.06. It is trading below its 25-day moving average of 8,862 99 and its 13-week moving average at 8,874.40. The broader Topix index fell 1 percent to 728.23. "The index has breached major support lines and there are worries that exporters may not meet their full-year targets even after they reduced their outlooks," said Hiroichi Nishi, general manager at Nikko Cordial Securities. "But the volume of selling may not be that big today ahead of the weekend," he added Carmakers and electronics makers led losses, with Toyota Motor Corp, Honda Motor Co, Toshiba Corp and Nikon Corp declining between 1.6 percent to 1.8 percent. Nexon Co Ltd slumped 9.7 percent to a record low of 827 yen after the online game provider cut its full-year operating profit forecast for the year ending December. Tsumura & Co surged 8.1 percent to a 28-month high after the manufacturer of Chinese medicine raised its full-year operating profit forecast and annual dividend estimate, citing better sales.
Trending On Reuters
India has promised to shave a third off the rate at which it emits greenhouse gases over the next 15 years, in a long-awaited contribution towards reaching a deal to slow global warming at a U.N. climate summit in December. Full Article