Japan's benchmark Nikkei index ended lower on Wednesday, after touching a month-high in the previous session, due to a selloff in value stocks that took a hit from worries over a looming recession.

Investors still favoured defensive shares such as healthcare, while many cyclical shares with relatively weak growth prospects, such as banks, shippers and steelmakers, underperformed.

The Nikkei share average fell 0.45% to 19,550.09 on profit-taking after a 3.13% gain on Tuesday.

With the Nikkei now paring back about 40% of its downturn in the first quarter on the coronavirus, its 50% retracement level of around 20,250 is seen as a next possible target though some investors are ready to lock in profits now.
The broader Topix ended almost flat at 1,434.07, up 0.04 points, though decliners outnumbered gainers by a ratio of 74 to 26.

"Some selected shares such as life science, semiconductor-related and cloud services are doing well. But the economy is likely to be in a bad shape for a while, so value-oriented shares will remain week," said Nobuhiko Kuramochi, chief strategist at Mizuho Securities.

The gap between growth-oriented and value stocks widened sharply as investors became more selective in picking shares that were likely to grow in the current environment.

The Topix Growth index rose 0.79% while the Topix Value fell 0.79%.
Among value-oriented shares, banks dropped 2.4%. Mitsubishi UFJ Financial Group fell 2.6% while Sumitomo Mitsui

Financial Group lost 2.1%. Mizuho Financial Group fell 2.8%.

Stock brokerage shares also suffered 2.8% losses, with Nomura Holdings down 2.3%.

Steelmakers fell 2.6%, with industry leader Nippon Steel shedding 3.7%. Shippers lost 3.7%.

Among firms that announced earnings revision, Gunosy dropped 9.9% after the internet media and advertisement start-up slashed its revenue forecast for the year to May by almost 18%.

UUUM fell 8.1% after the firm that specialises in the management of YouTubers and influencers revised down its annual estimates, cutting net profit guidance for the year to May by almost a half.

On the other hand, battered airline shares bounced back 2.0%.

Drugmakers gained 0.9%, with Chugai Pharmaceutical rising 2.7% to record high.

Drugstore chain operator Welcia Holdings also touched a record high with 4.4% gains.

Turnover rose to the highest level in a week, with 2.528 trillion yen worth of shares changing hands on the main board.

Reuters