Nikkei slides 2.5 pct on European debt worries

* Nikkei falls below 25-day MA around 11,100

* Exporters hit on fears Greek credit problems could spread

* Toray rises on plan to make carbon fibre car parts

By Rika Otsuka

TOKYO, April 28 (BestGrowthStock) – Japan’s Nikkei average slid 2.5
percent on Wednesday, with exporters taking a beating after
downgrades of Greece and Portugal’s credit ratings sparked fears
the euro zone’s debt problems were spreading.

Shares of blue-chip exporters including Canon Inc (7751.T: )
dropped after rating agency Standard and Poor’s slashed Greet
debt to junk status on Tuesday and also downgraded Portugal,
fuelling concerns about the euro zone economic stability.

The Nikkei fell below its 25-day moving average, now around
11,100, also hurt as investors took profits on shares like
industrial robot maker Fanuc Ltd (6954.T: ) which had rallied on
better-than-expected profits or earnings guidance.

“The biggest factor behind today’s fall is worries that
credit problems could spread to other parts of Europe,” said
Masayoshi Yano, a senior market analyst at Meiwa Securities.

“Investors now fear that credit woes which started in Greece
could slow down the whole European economy.”

The benchmark Nikkei (.N225: ) dropped 276.67 points to
10,935.99, while the broader Topix (.TOPX: ) fell 2 percent to

The slide in Tokyo stocks follows a tumble for U.S. shares
which posted their worst day in nearly three months on Tuesday
following downgrades of Greece and Portugal, and as a grilling of
Goldman Sachs on Capitol Hill heightened the possibility of
financial reform. [.N]

Analysts said the Nikkei is expected to find near-term
support at 10,800, roughly a 38.2 percent retracement of a
two-month rally that started in early February and pushed the
Nikkei up to an 18-month peak of 11,408.17 in early April.

“The Nikkei is not expected to fall below 10,000 in the
mid-term as many Japanese firms are reporting solid earnings
figures, although the market may succumb to more profit-taking,”
Meiwa’s Yano said.

Honda Motor skidded 1.8 percent to 3,275 yen and Canon Inc
lost 2.5 percent to 4,275 yen.

Among firms that saw heavy profit-taking after rallies,
Fanuc Ltd (6954.T: ) shed 4.2 percent to 11,180 yen to become the
most actively traded stock by turnover on the main board, while
copier and printer maker Konica Minolta Holding (4902.T: ) lost 3.8
percent to 1,207 yen.

Mazda Motor Corp (7261.T: ), Japan’s No.5 automaker, fell 2.9
percent to 273 yen after its earnings forecast fell short of
market expectations. [ID:nTOE63Q07J]

But Toray Industries (3402.T: ) rose 2 percent to 555 yen after
the textile maker said it and German carmaker Daimler AG
(DAIGn.DE: ) will jointly develop carbon fibre car parts.

Canon fell 2.5 percent to 4,275 yen.

Stock Market Investing

(Reporting by Rika Otsuka; Editing by Edwina Gibbs)

Nikkei slides 2.5 pct on European debt worries