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Nikkei lower on Draghi comments

Friday, February 08 07:38:07

Japan's Nikkei share average dropped today to mark its first weekly loss in 13 weeks as sentiment was dented by gloomy comments from the ECB president on Europe's outlook, while Sony Corp tripped up on disappointing quarterly results.

The Nikkei fell 1.8 percent to 11,153.16, snapping its longest weekly winning streak in 54 years by ending 0.3 percent down on the week. The benchmark also pulled further away from a 33-month high of 11,498.42 struck on Wednesday.

A sell-off stretched into its second day on concern that the euro zone will continue to stumble, after European Central Bank President Mario Draghi said on Thursday that there were more negative risks in the euro zone than positive ones.

"It looks as if investors are using this as a reason to sell off and it seems somewhat far fetched," said Hiroyuki Fukunaga, CEO of Investrust, echoing other market players who said weakness in the euro zone is already priced in.

Yet with the Nikkei rising nearly 30 percent from mid-November, when Prime Minister Shinzo Abe, then a candidate for leader of the opposition, began calling for aggressive monetary easing, investors have waited for the right time to take profits.

Sony Corp led the losses, tumbling 10.1 percent after profits in the October-December quarter badly missed market expectations. It was the second most traded stock on the main board.

Sony's share price had rocketed 58.5 percent between the beginning of January to Thursday, catching up with the Nikkei's sharp gains after lagging through November and December. ( C) Reuters