Japan's Nikkei average edged down by the close on Monday, falling for the seventh session as record-breaking oil prices cut appetites for shares among investors already cautious over U.S. corporate earnings due this week. The Nikkei hit a three-week closing low, with NEC Corp. <6701.T> falling to its lowest close since June last year after the company warned late last week of a wider half-year loss due to slow demand for mobile phones, which heightened investor concern about domestic earnings. The Nikkei <.N225> fell 17.33 points or 0.16 percent to 10,965.62, its lowest close since Sept. 30, after losing 420 points or 3.5 percent in the previous six trading days. The broader TOPIX index <.TOPX> fell 0.39 percent to 1,101.11. Analysts said even after the market's recent sharp losses, trade had slowed as investors were nervous about buying stocks due to the relentless rise in oil prices.
"There is a vague sense of fear over the outlook for stock markets around the globe," said Masaharu Sakudo, an adviser at Tachibana Securities. "One of several things to worry about is the seemingly unstoppable rally in oil prices." Supply worries drove U.S. light crude oil futures for November delivery to a record peak of $55.33 a barrel in Asia on Monday, raising concern over the effect of high energy costs on companies and consumers. Airline firms took a hit, with Japan Airlines Corp. <9205.T>, Asia's biggest airline, falling 1.69 percent to 291 yen. NEC, Japan's third-largest electronics conglomerate, slumped 1.71 percent to 634 yen. U.S. earnings reports from such bellwether firms as IBM and Texas Instruments Inc. due later on Monday are cautiously awaited as the U.S. corporate earnings season swings into top gear, with Japan's soon to follow. Investors also hastened to lock in profits from Nippon Steel Corp. <5401.T> and its rivals, which have been among the market's main gainers this year thanks to increased demand from China and other countries. Nippon Steel, Japan's biggest steel maker, dropped 2.72 percent to 250 yen and JFE Holdings Inc. <5411.T> lost 3.1 percent to 2,965 yen.
Trading slowed with only 1.031 billion shares changing hands on the first section, the lowest daily total since Aug. 30, and compared with 1.371 billion shares on Friday. Decliners outnumbered advancers 861 to 565.///