By Osamu Tsukimori, CBS MarketWatch.com
TOKYO (CBS.MW) - The Nikkei Average fell for a third straight session Tuesday as tech and other shares fell almost across the board amid heightened concerns about higher U.S. interest rates in one of Japan's key export markets.
The Nikkei Average ended down 103 points, or 0.9 percent, to 11,387.70, while the broader Topix was down 7 points, or 0.6 percent, at 1,151.30.
Investors were sidelined as they awaited key U.S. events later in the session, such as the consumer price index and a speech by Federal Reserve Chairman Alan Greenspan, said Masaru Ueda, head of investment strategy at Marusan Securities. "The robust U.S. retail sales data also spurred speculation that the Federal Reserve may raise interest rates by 50 basis points, rather than 25 basis points," Ueda said.
U.S. retail sales rebounded in May, rising 1.2 percent after dropping a revised 0.6 percent in April, in line with economists' expectations.
Other regional markets mostly rose, helped by strength in tech stocks.
South Korea's Kospi index snapped a five-session losing streak, adding 1.8 percent, Taiwan's Weighted Average gained 1.3 percent, China's Shanghai Composite was up 1.9 percent and the Hang Seng index in Hong Kong was up 0.4 percent. Singapore's Straits Times index was up 0.05 percent. Australia's S&P/ASX 200 index eased 0.3 percent.
In Tokyo, tech shares extended declines, led by chip-related issues. Advantest /zigman2/quotes/206869087/delayed JP:6857 +1.74% /zigman2/quotes/202479540/composite ADTTF +0.42% lost 3 percent and Tokyo Electron /zigman2/quotes/202883609/delayed JP:8035 +2.86% was down 1.2 percent.
NEC /zigman2/quotes/205173342/delayed JP:6701 +0.38% declined 2.6 percent and Toshiba /zigman2/quotes/205628942/delayed JP:6502 +2.07% /zigman2/quotes/203922036/composite TOSBF -0.63% fell 2.6 percent.
Sharp /zigman2/quotes/203224600/delayed JP:6753 +2.46% rose 0.4 percent. The electronics maker said Monday it will begin marketing 45-inch TV sets in August in Japan, which it says are the world's biggest liquid crystal display TV sets capable of receiving digital TV broadcast.
Fujitsu fell 1.4 percent. The PC giant and German software maker SAP AG on Tuesday said that they will jointly promote business software and hardware solutions worldwide.
Banking issues also fell, led by Resona Holdings /zigman2/quotes/203178794/delayed JP:8308 +1.48% , down 2.6 percent.
In the auto sector, Mitsubishi Motors /zigman2/quotes/208298710/delayed JP:7201 +3.72% /zigman2/quotes/200876874/composite MMTOF +2.71% fell 3.1 percent. The struggling automaker decided to cancel its winter bonus to its employees to save about 5 billion yen ($45 million), in addition to forgoing the retirement pay for its three outgoing executives, the Nihon Keizai Shimbun reported. Separately, its affiliate Mitsubishi Fuso Truck and Bus said Monday it will recall another 450,000 vehicles in Japan.
Softbank Investment /zigman2/quotes/200067066/delayed JP:8473 -0.98% was flat, erasing losses after it announced it will spend $18.9 million to buy shares to obtain a controlling stake in E-Trade Korea, South Korea's first online securities company, which was founded by a group of investors including LG Investment and Softbank
Among the gainers were Toyota /zigman2/quotes/203803129/delayed JP:7203 +0.54% /zigman2/quotes/200537742/composite TM -2.81% , up 1.4 percent, Sony /zigman2/quotes/201361720/delayed JP:6758 +2.94% , up 1.2 percent and telephone giant NTT /zigman2/quotes/200718273/delayed JP:9432 +2.48% up 1.5 percent.
Decliners outpaced gainers 1116 to 349 on the First Section of Tokyo Stock Exchange. Volume edged down to 1.148 billion shares from Monday's 1.199 billion.
The dollar traded at 110.94 yen in late Tokyo, compared with 111.05 yen late Monday in the U.S.
On Monday, the Dow Jones Industrial Average fell 0.7 percent, while the Nasdaq Composite index shed 1.5 percent.
In Seoul, Samsung Electronics SSNGY 0.00% added 2.3 percent. The world's third-biggest mobile phone maker expects to sell up to 22 million handsets in the second quarter, up 9.5 percent from a record 20.1 million in the previous quarter, Kwang Bae Roh, general manager of international sales told Reuters in an interview.
Hynix Semiconductor soared 6.3 percent and S Oil jumped 10.3 percent.
Hyundai Motor rose 0.7 percent. South Korea's biggest automaker said its China joint venture with Beijing Automobile Industry Holdings will boost production to an annual 600,000 vehicles from the current 130,000 by the end of 2007, AFP reported.
In Sydney, News Corp. /zigman2/quotes/204787942/composite NWS -4.78% and BHP Billiton /zigman2/quotes/201448516/delayed AU:BHP +3.18% /zigman2/quotes/208108397/composite BHP -2.64% both shed 0.8 percent.
Lion Nathan /zigman2/quotes/200006181/composite LNNTF -78.00% , the nation's second-largest brewer, surged 4 percent.
In Singapore, Chartered Semiconductor was up 0.7 percent, while Singapore Telecom declined 1.4 percent.