Roundup: Nikkei falls 0.98 pct. as oil prices slide, ECB reverses Greek debt move

The Nikkei stock index fell 0.98 percent Thursday as investor sentiment was soured by a halt in crude oil's price rally and a firmer yen, coupled with growing concerns about Greece's ongoing debt-negotiations as the European Central Bank (ECB) toughens its stance.

The Nikkei 225 index dropped 174.12 points to end at 17,504.62, while the broader Topix index of all first-section issues lost 0. 49 percent, or 6.89 points, to close the day at 1,410.11.

Analysts here said that markets got off to a negative start following the ECB suddenly reversing its decision to allow Greece to exchange its debt for growth-linked bonds.

The drastic move by the central bank came after Greece's new finance minister, Yanis Varoufakis, told ECB President Mario Draghi and other creditors in the eurozone that Greece would do all it could to reform its economy. Draghi, for his part, in stark contrast to the bank's latest stance, told Varoufakisthe the ECB would pull out all the stops to help member states like Greece.

Greece's debt burden will now be returned to Athens' central bank to deal with, analysts here explained, with the bank having to make sure its lenders have enough capital to fund the nation, until Greece can gain support from outside the country and forge a new and acceptable debt-repayment plan. "While we don't foresee Greece ultimately leaving the European Union or a collapse in the currency, until this problem is resolved it might be hard for stocks to reach new highs,"said Mitsushige Akino, an executive officer at Ichiyoshi Asset Management Co.

Compounding a risk-off mood in Tokyo was the recent rally in oil prices coming to an end. The four-day rally was brought to a close as U.S. inventories rose for a fourth successive week and hit their highest level since 1982, with stock increasing by 6.33 million barrels in the last week of January.

In currency markets, the U.S. dollar was changing hands at 117. 14 yen in the afternoon on Thursday, compared to 117.18 yen logged in New York, and 117.74 yen booked on Wednesday.

Oil sensitive issues gained and lost, with exploration giant Inpex sinking 3.98 percent to 1,360 yen as crude's prices dropped, but Japan Airlines Co. gained 1.1 percent to 3,765 yen, on cheaper fuel costs.

Other issues moved on individual earnings reports, with consumer electronics behemoth Sony surging 12 percent to close at 3,101 yen, following its preliminary operating profit more than doubling to 178.3 billion yen (1.5 billion U.S. dollars), in the three months ended Dec. 31.

Sony said it now expects an operating profit of 20 billion yen, reversing an October forecast that it would lose 40 billion yen.

Hitachi plummeted 10 percent to 781 yen, however, after reporting its operating profit dropped to 108.2 billion yen, below median analysts'estimates. Hitachi maintained its full-year net- income projection at 250 billion yen, some 30 billion yen below analysts' expectations.

Top automaker Toyota reversed 1 percent to end at 7,654 yen, despite the firm increasing its full-year profit outlook to a record 2.13 trillion yen and increasing its full-year net profit forecast to a record 18.1 billion U.S. dollars.

But Mitsubishi Estate found favor Thursday, adding 2.7 percent to 2,428 yen, after the firm said its net profit for the nine months through December gained 65 percent to 96.6 billion yen and the company raised its profit target to 67 billion yen (571 million U.S. dollars) for the year ending March 31, compared to an initial projection of 60 billion yen.

Trading volume on Thursday dropped to 2.64 billion shares on the Tokyo Exchange's First Section, down from Wednesday's volume of 2.72 billion shares, with declining issues outnumbering advancing ones by 1,174 to 570. Endi