Japan’s Nikkei slips on chip declines, China weakness

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TOKYO — Japan’s Nikkei share average edged lower on Tuesday, slipping from the 27,000 level it touched for the first time in two weeks, dragged by chip stocks and as weakness in China weighed on sentiment.

The Nikkei slipped 0.15% to 26,830.69, putting it on course for its first session of losses in four. It earlier rose as much as 0.52% to 27,010.29, a level not seen since June 13, but turned decisively lower after equity markets in Hong Kong and Shanghai opened lower.

“Other than being an important psychological level, 27,000 is also right about where the 25-day moving average currently sits, so it’s a level that’s attracting profit-taking,” said a trader at a domestic securities firm.

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Meanwhile, U.S. e-mini stock futures pointed to a 0.26% decline at the reopen, after the S&P 500 closed 0.3% lower in a volatile session overnight.

Hong Kong’s Hang Seng index was last down 0.75%, and Chinese blue chips were down 0.1%, after managing to claw back some of their early losses.

Despite the Nikkei’s losses, winners far outnumbered losers on the index, by 144 to 76, with five stocks flat.

The broader Topix was able to hold on to small gains into the break, gaining 0.18% to 1,890.75.

The Nikkei’s best performing sector was energy, up 2.75% amid a rebound in crude oil prices. Real estate also had outsized gains, up 2.35%.

At the other end, basic materials shares were the worst performers, down 0.27%. Tech and industrials lost 0.14% each.

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Chip-making equipment makers Tokyo Electron and Advantest were among the Nikkei’s biggest drags, with Tokyo Electron’s 1.86% slide shaving off 31 index points and Advantest’s 2.22% retreat knocking off 12 points.

Startup investor SoftBank Group also fell 0.74%.

Automakers outperformed, taking cheer from the recent yen weakness, which boosts the value of overseas sales. Mitsubishi Motors was the Nikkei’s biggest percentage gainer, rallying 4.25%. Alliance partner Nissan jumped 2.53%, and Toyota added 0.82%.

Oil company Inpex was the second best performer, up 3.54%.

Uniqlo store operator Fast Retailing boosted Nikkei the most, adding nearly 19 index points with its 0.74% advance to a seven-month high.

(Reporting by Tokyo markets team; Editing by Amy Caren Daniel)