* Oil beneficiary stocks underperform as oil prices extend gains
* Q3 results have shown 14 pct rises in pre-tax profits on year –
By Ayai Tomisawa
TOKYO, Feb 3 (Reuters) – Japanese stocks fell on Tuesday after disappointing U.S. economic data weighted on sentiment, while airlines and rubber makers continued to drop on a rebound in oil prices.
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The Nikkei share average dropped 0.4 percent to 17,493.16 points by mid-morning after opening higher.
“The Japanese market would have been strong if currency investors were taking risks and the strong dollar/yen trend continued, but the current currency levels show that investors are still not confident about U.S. economic fundamentals,” said Kazuhiro Miyake, chief strategist at Daiwa Securities. The pace of growth in the U.S. manufacturing sector slowed more than expected in January, and U.S. consumer spending recorded its biggest decline since late 2009 in December, with cheaper gasoline not translating into higher activity.
But Miyake said stronger-than-expected Japanese corporate earnings for Oct-Dec were supporting sentiment.
As of Friday, about 40 percent of the companies listed on the mainboard had reported their third-quarter results. Their pre-tax profits rose 14 percent on the year, compared to a previously expected 2 percent drop, Miyake said.
On Tuesday, airline companies and rubber product makers, which are beneficiaries from weak oil prices in the past few months, continued to drop after oil prices rose strongly again on Monday. Oil prices have rebounded 11 percent over the last two straight sessions. Japan Airlines dropped 3.4 percent, and ANA Holdings fell 1.4 percent.
Bridgestone Corp dipped 2.4 percent and Yokohama Rubber shed 1.4 percent.
Exporters were mixed, with Toyota Motor Corp falling 1.1 percent, Nissan Motor Co adding 0.1 percent and Panasonic Corp rising 1.9 percent.
The broader Topix shed 0.4 percent to 1,403.54 and the JPX-Nikkei Index 400 declined 0.3 percent to 12,743.65.
(Editing by Kim Coghill)
