The stock market in Japan closed lower on Monday, dragged down by telecommunication stocks as investors preferred to switch to cyclical stocks on expectations the stimulus package will increase lending for businesses. Profit taking was also witnessed in select stocks ahead of the release of results by major companies in the U.S. during this week.

Positive news from Wells Fargo lifted market indices on Wall Street last Thursday. The Dow closed up 246.27 points or 3.14% at 8,083, the Nasdaq closed up 61.88 points or 3.89% at 1,653 and the S&P 500 closed up 31.40 points or 3.81% at 857. The U.S. markets were closed for a public holiday on Friday.

In Asian trading, crude oil ended lower by $0.75 at $51.49 a barrel in electronic trading. Light sweet crude for May delivery rose about 6% or $2.86 to $52.24 a barrel on Thursday following better-than-expected results from retailers suggesting a possible rise in consumer spending.

The benchmark Nikkei 225 Index, after having opened weaker at 8,930 compared to its previous close of 8,965, oscillated between gain and loss in volatile trading before finally closing weaker by 39.68 points, or 0.44%, at 8,934. The broader Topix Index of all First Section issues, however, closed in positive territory with a gain of 3 points, at 849.

On the economic front, a report released by the Bank of Japan showed that Japan's corporate goods prices index or the producer price index fell 0.2% month-over-month in March, in line with the expectations. During February, the index declined 0.5%. Producer prices have been seeing a declining trend since September 2008.

Telecommunication stocks ended lower as investors preferred to switch from defensive stocks to cyclical stocks in anticipation of increased lending to businesses as outlined in the new stimulus package announced by Prime Minister Taro Aso on Friday.

The second-largest wireless company in the country, KDDI Corp, declined 3.85% and Nippon Telegraph & Telephone Company lost 2.59%. NTT Docomo shed 2.09% and NTT Data Corp slipped 2.63%.

Trading houses gained on the stimulus package announcement. Mitsubishi Corp. gained 4.01%, Sumitomo Corp. advanced 2.67% and Itochu rose 5.70%.

Automakers advanced on hopes of global recovery. Honda Motor gained 0.53%, Isuzu Motors rose 6.45% and Toyota Motor edged up 0.77%.

Exporters ended mixed on profit taking. Among the major exporters, Canon edged up 0.31%, but Sony lost 1.16% and Sharp edged down 0.22%.

Financial stocks ended mixed. Mitsubishi UFJ gained 2.71%, and Resona Holdings added 1.05%. However, Sumitomo Mitsui fell 2.25%, Mizuho Financial lost 1.01% and brokerage Nomura Holdings declined 1.42%.

Oil stocks ended mixed. While Inpex gained 1.12%, and Nippon Oil added 1.78%, Showa Shell slipped 0.76%.

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