Japan Nikkei falls on profit taking

Headline indices of the Japan share market stumbled on Wednesday, 13 March 2019, as risk-off mood gripped investors on mixed US shares overnight amid worries about business confidence receding on benign US inflation data. Market mood was also dampened after data showed machinery orders fell in January at the fastest pace in four months. Risk appetite had further soured after British Prime Minister Theresa May's plan to leave the European Union being nixed in a parliamentary vote overnight. Around late afternoon, the 225-issue Nikkei Stock Average dropped 276.27 points, or 1.3%, at 21,227.42. The broader Topix index of all First Section issues on the Tokyo Stock Exchange fell 18.09 points, or 1.13%, at 1,587.39.

All 33 subsectors of the Tokyo Stock Exchange declined, with shares in Securities & Commodities Futures, Oil & Coal Products, Insurance, Marine Transportation, Other Financial Business, Nonferrous Metals, and Rubber Products issues being notable losers.

Japan's machinery orders fell in January at the fastest pace in four months due to declining demand in the auto and telecommunications equipment sectors as the U.S.-China trade war dented global demand. Japan core machine orders dropped a seasonally adjusted 5.4 percent in January, the Cabinet Office said on Wednesday - coming in at 822.3 billion yen, following the downwardly revised 0.3 percent fall in December (originally -0.1 percent). On a yearly basis, core machine orders sank 2.9 percent, following the 0.9 percent gain in the previous month.

A soft US inflation report for February reinforced expectations the Federal Reserve will stay patient on rates and could even sound more dovish at its policy meeting next week. Annual consumer price inflation slowed to its lowest since September 2016 at 1.5%.

British lawmakers crushed Prime Minister Theresa May's European Union divorce deal, forcing parliament to decide within days whether to back a no-deal Brexit or seek a last-minute delay. Lawmakers voted against May's amended Brexit deal by 391 to 242 as her last-minute talks with EU chiefs on Monday to assuage her critics' concerns ultimately proved fruitless. Parliament will vote later Wednesday on whether to leave the EU with no deal, and if that fails, a further vote on Thursday will decide whether to extend the Brexit deadline.

Banks and financials were lower, with Mitsubishi UFJ Financial slipping 0.5% and Sumitomo Mitsui Financial down 0.4%. Insurers Dai-ichi Life Holdings shed 2.1%, T&D Holdings tumbled 4.4% and MS&AD Insurance dropped 1.7%. Trading houses were lower, with Mitsubishi Corp down 0.5% and Itochu down 0.5%.

Electric machinery and other machinery stocks were battered. Chip equipment makers Advantest Corp shed 2.2%, Tokyo Electron declined 1.9%, while TDK Corp plunged 4.2% and Hitachi Ltd dropped 2.9%.

Airlines were also lower with Japan Airlines down 0.4% and ANA Holdings down 0.9%. Automakers were sold, with Toyota Motor Corp and Mazda Motor both falling 1.2%, while Subaru Corp dropped 1.7%.

Bucking the fall, Shin-Etsu Chemical rose more than 2% after the company said to buy back up to 3.3% of its own shares worth 100 billion yen. .

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