Friday, October 29, 2010

Nikkei hits 7-wk closing low, breaches key support

TOKYO: Japan's Nikkei fell 1.8 percent to a seven-week closing low on Friday, Oct 29 as disappointing earnings hit shares of companies such as Sharp, with downward momentum accelerating after the index breached a key technical support level.

Investors were keen to lighten long positions ahead of the weekend and before a blizzard of earnings reports due after the close on Friday and a highly anticipated Federal Reserve policy-setting meeting on Nov. 2-3.

The benchmark Nikkei ended down 163.58 points at 9,202.45, its lowest close since Sept. 9.

The broader Topix slipped 0.4 percent to 810.91.

Technical sentiment towards the Nikkei faltered as it dropped below closely watched support at 9,300 for the first time since Sept. 15, traders said, the day when share prices jumped sharply after Japanese authorities intervened in the currency market for the first time in six years.

The 9,300 area is a key region of support based on the Nikkei's daily Ichimoku cloud.

Hurt by worries about the strength of the yen and its impact on corporate earnings, the Nikkei shed 1.8 percent in October, its biggest monthly fall since August. It fell 2.4 percent on the week, also its worst weekly fall in two months. - Reuters

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