Jan. 26 (Bloomberg) -- Japanese stocks declined, snapping a seven-day winning streak on the Topix Index, amid speculation the market is overbought and as European policymakers squabbled over the mounting cost of a Greek rescue.
Sony Corp., which depends on Europe for a fifth of its sales, lost 1.4 percent. Nippon Electric Glass Co. tumbled 6.7 percent after bellwether Corning Inc.’s profit plunged on falling glass prices. Tokyo Electric Power Co. jumped 5.5 percent on a report the utility plans to take public funds to avoid bankruptcy.
The Topix, Japan’s broadest equity gauge, fell 0.4 percent to 764.61 at the 3 p.m. close in Tokyo. The Nikkei 225 Stock Average slid 0.4 percent to 8,849.47. The gauge has risen 4.7 percent this year. Stocks fell today even after the Federal Reserve extended its pledge to hold its key rate near zero.
“The market is overheated,” said Kenichi Hirano, general manager and strategist at Tachibana Securities Co. in Tokyo. “Investors have already priced in both the European debt issues and the U.S. news.”
The 25-day Toraku index, a momentum indicator, exceeded 120 yesterday, a level that suggests the market may be poised to fall. The gauge surged 12 percent yesterday to its highest since July 27.
Futures on the Standard & Poor’s 500 Index slid 0.1 percent today after the gauge rose 0.9 percent yesterday in New York after the Fed’s announcement and Chairman Ben S. Bernanke said the central bank is considering another round of bond purchases to bolster growth.
Debt Relief Debate
In Europe, a senior member of German Chancellor Angela Merkel’s government rejected suggestions that the European Central Bank take losses on its Greek debt holdings after the International Monetary Fund said more public funds were needed to fight the crisis. Policymakers are continuing to negotiate with private holders of Greek bonds to avert a default.
Sony lost 1.4 percent to 1,434 yen. Canon Inc., which depends on Europe for about a third of its sales, slipped 0.7 percent to 3,485 yen.
Glassmakers declined the most in the 33 Topix industry groups after Corning reported fourth-quarter profit fell 53 percent as prices for glass used in liquid-crystal displays tumbled. Nippon Electric Glass tumbled 6.7 percent to 761 yen, while Asahi Glass Co. slumped 3.6 percent to 671 yen.
Fuji Electric Co. declined the most on the Nikkei 225, plunging 7.5 percent to 210 yen, after the device maker slashed its full-year net income forecast 42 percent to 7 billion yen ($90 million), citing falling sales in China and Europe.
Tokyo Electric Power gained the most on the Nikkei 225, rising 5.5 percent to 213 yen after the Yomiuri newspaper reported the company will take 1 trillion yen in public funding to help it survive after the Fukushima nuclear disaster. The Nikkei newspaper reported the utility also known as Tepco expects to return to profit in three years.
Among other companies that rose, commodity-related stocks gained. Toho Zinc. Co., a non-ferrous metal producer, climbed 2.9 percent to 322 yen. Mitsubishi Materials Corp., which gets more than 40 percent of its revenue from copper sales, gained 2.6 percent to 240 yen. JX Holdings Inc., an oil refiner, rose 2.4 percent to 472 yen.
Crude oil for March delivery climbed 0.5 percent to settle at $99.40 a barrel in New York yesterday. The London Metal Exchange Index of prices for six industrial commodities including copper and aluminum rose 0.7 percent to its highest level since Sept. 20. Prices climbed on speculation that continued low interest rates in the U.S. will boost growth.
Japanese stocks plunged last year after the March 11 earthquake and resulting Fukushima nuclear disaster. The Topix tumbled 19 percent in 2011, eclipsing an 11 percent drop on the Stoxx Europe 600 Index.
--With assistance from Satoshi Kawano in Tokyo. Editors: Jim Powell, Jason Clenfield.
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