Sony profit outlook helps push Nikkei 1.5 pct lower

* Nikkei gains 0.9 pct on week, down 0.8 pct year to date

* Sony tumbles as profit forecast falls short

* Shinsei falls; Aozora merger off

By Elaine Lies

TOKYO, May 14 (BestGrowthStock) – Japan’s Nikkei average lost 1.5
percent on Friday, hit by a disappointing profit outlook from
Sony Corp (6758.T: ) but the benchmark came off the day’s lows as
the yen weakened.

Shinsei Bank (8303.T: ) fell 4.5 percent after it cancelled a
planned merger with Aozora Bank (8304.T: ) and posted a second
straight year of losses, prompting Japan’s banking minister to
call for strong government guidance. [ID:nTOE64D00H]

Sony’s outlook fell far short of consensus expectations,
sending the stock down nearly 7 percent and weighing heavily on
the electronics sector.

“There’s a strong sense of disappointment that the company’s
full recovery scenario remains unclear, though market
expectations could have been too high and its TV business in
emerging countries appears to be on a recovery track,” said
Tsuyoshi Segawa, an equity strategist at Mizuho Securities.

Worries about a stronger yen and a fall on Wall Street had
also prompted profit-taking in morning trade after the Nikkei
rose more than 2 percent the previous day, but market players
said many of these concerns eased as the day went on.

“Right now, investors are putting more weight on factors such
as earnings and economic indicators, both of which are showing
signs of recovery,” said Hideyuki Ishiguro, a strategist at
Okasan Securities.

“The recent flows we’ve seen to safer assets such as gold are
likely to settle down a bit now, with funds to start returning to
stocks.”

The benchmark Nikkei (.N225: ) shed 158.04 points to 10,462.51.
At one stage it had fallen 2.2 percent. For the week, it rose 0.9
percent but is down 0.8 percent on the year to date.

The broader Topix (.TOPX: ) lost 1.2 percent to 936.45.

Market players said they thought support levels were likely
to gradually rise over the next few weeks since the Nikkei held
onto gains above its 200-day moving average just above 10,300
after falling below it last week.

“While it’s unlikely that we’ve seen the end of problems in
the euro zone, markets may be turning their eyes to local factors
for now — after all, Wall Street fell Thursday on what were
basically U.S.-specific factors,” said Masayoshi Okamoto, head of
dealing at Jujiya Securities.

U.S. stocks (Read more about the stock market today. ) slid on downbeat comments on the economy from
company executives. [.N]

YEN WEAKENS, SONY STUMBLES

Shares pared losses in afternoon trade as the dollar rose 0.1
percent against the yen to 92.82 yen and the euro rose 0.5
percent to 116.50 yen. (JPY=: ) (EURJPY=: ) [FRX/]

Sony tumbled 6.8 percent to 2,950 yen after it forecast an
annual operating profit of 160 billion yen ($1.7 billion), up
fivefold from a year earlier, but short of a 209 billion yen
consensus. [ID:nTOE64B041]

Konica Minolta (4902.T: ) fell 3.9 percent to 1,070 yen after
the company forecast an annual operating profit below consensus.

Alps Electric (6770.T: ) surged 11.8 percent to 808 yen,
extending gains made the previous day, after Mitsubishi UFJ
Morgan Stanley Securities hiked their rating on the company two
notches, to “2” from “4,” citing consensus-beating earnings
announced on Wednesday and the positive impact of cost cutting.

Shinsei shares lost 5 yen to 106 yen.

Separately, Aozora Bank (8304.T: ) said it was cancelling its
merger plans with Shinsei. Aozora, whose shares were down 5
percent, also said it may consider entering into a new business
alliance with Shinsei. [ID:nTFD006390]

Trade was moderate, with 2.6 billion shares changing hands on
the Tokyo exchange’s first section, down from the four-month high
of 3.1 billion market last Friday.

Declining shares outnumbered advancing ones by more than 2 to
1.

Stock Today

(Additional reporting by Aiko Hayashi; Editing by Edwina Gibbs)

Sony profit outlook helps push Nikkei 1.5 pct lower