The Nikkei dropped further to close below 17,000 for the first time in over three months on the Tokyo Stock Exchange on Monday, with the market falling prey to a flurry of selling reflecting tumbles in overseas stock markets late last week.
The Nikkei sagged 191.54 points, or 1.12 percent, to finish at 16,955.57 after slumping 93.84 points on Friday. It last closed below 17,000 on Sept. 29.
The Topix was down 14.52 points, or 1.04 percent, at 1,387.93.
Both indexes extended their losing streaks to a third session.
The Tokyo market started sharply lower on the heels of plunges in U.S. and major European stock markets on Friday. Soon after the dismal opening, the Nikkei fell further to as low as 16,665.05 with a loss of about 480 points, hitting the lowest level since Jan. 16 last year on an intraday basis.
Wall Street’s tumble on Friday stemmed from heightened worries about continued drops in crude oil prices and disappointing U.S. retail sales and industrial production data, both for December, brokers said.
Tokyo stocks showed some resilience in the afternoon thanks to buybacks of undervalued issues and Shanghai equities’ rise on Monday, with the Nikkei temporarily surfacing back above 17,000, they said.
But the buybacks were limited amid prevailing uncertainties over the course of the U.S. and Chinese economies, as well as sluggish crude oil prices, they said.
Selling to cash in gains by investors in oil-producing countries also overshadowed the market, after crude oil futures in New York slipped below 30 dollars per barrel for the first time in 12 years and one month on Friday, they said.
Investors also found it difficult to step up purchases ahead of the releases of a series of Chinese economic indicators on Tuesday, including gross domestic product for October-December 2015, and December industrial production and retail sales data, they said.
The Tokyo market would likely see “aggressive buybacks if the Chinese GDP data turn out far better than expectations,” said Ryuta Otsuka, strategist at the investment information department of Toyo Securities Co.
Falling issues outnumbered rising ones 1,618 to 258 on the TSE’s first section, while 59 issues were unchanged.
Volume decreased to 2,230 million shares from Friday’s 2,448 million shares.
Resources-related issues were battered by selling reflecting the crude oil market slump. They included oil wholesalers JX Holdings and Idemitsu Kosan, and trading houses Mitsui and Mitsubishi.
Selling also hit heavily weighted components of the Nikkei average, among them clothing retailer Fast Retailing, robot maker Fanuc and mobile phone carrier Softbank Group.
By contrast, ailing chipmaker Renesas Electronics, which is undergoing restructuring with support from government-affiliated investment fund Innovation Network Corp. of Japan, jumped 3.21 percent on the back of a media report that INCJ plans to sell a stake in Renesas and motor maker Nidec is believed to be a major candidate to buy the shares, brokers said. Nidec also gained ground.
In the financial sector, banking groups Mitsubishi UFJ and Mizuho, and brokerage giant Nomura met with selling.
In index futures trading on the Osaka Exchange, the key March contract on the Nikkei average dived 290 points to 16,860.