Business / Financial Markets | TSE DATA & REPORT

Tokyo stocks fall further on economic woes

JIJI

Stocks fell further on the Tokyo Stock Exchange on Thursday, driven down by concerns about the outlook for the global economy.

The 225-issue Nikkei average lost 140.80 points, or 0.65 percent, to end at 21,456.01, after falling 129.47 points on Wednesday.

The Topix index of all first-section issues finished down 13.59 points, or 0.84 percent, at 1,601.66 following a decline of 3.98 points the previous day.

The Tokyo market’s decline came as U.S. equities fell overnight after the Organization for Economic Cooperation and Development lowered its outlook for global economic growth.

Sentiment was also dampened by news of a major production cut by Japanese chipmaker Renesas Electronics Corp. and a sharp cut in Mizuho Financial Group Inc.’s profit projection, brokers said.

Referring to the OECD’s downbeat growth outlook, an official at a Japanese securities house said concerns about a global economic slowdown have been building. It is necessary to keep a close watch on U.S. jobs data due out Friday, the official said.

Mitsuo Shimizu, chief strategist at Aizawa Securities Co., said, “The weakness of Renesas and other semiconductor-related issues gave an additional damper on stock prices.”

News of Renesas’ partial plant shutdown, which comes amid slowing economic growth in China, is an apparent sign of impacts from trade tensions between Washington and Beijing, Shimizu said.

Hiroaki Hiwada, strategist at Toyo Securities Co., said the Tokyo stock market’s downside has been solid in recent sessions, backed by buying on dips and exchange-traded fund buying by the Bank of Japan.

Falling issues outnumbered rising ones 1,505 to 556 in the TSE’s first section, while 72 issues were unchanged.

Volume increased to 1.254 billion shares from 1.016 billion shares on Wednesday.

Renesas plunged 14.62 percent, while chip equipment makers Tokyo Electron and Advantest Corp. dropped 2.95 percent and 2.47 percent, respectively.

Mizuho lost 1.54 percent. Among rivals, Mitsubishi UFJ Financial Group Inc. fell 1.62 percent and Sumitomo Mitsui Financial Group Inc. declined 1.77 percent.

Other losers included industrial robot producer Fanuc Corp. and Yaskawa Electric Corp.

On the other hand, domestic demand-oriented issues attracted purchases as investors sought safe bets amid growing concerns over global growth. Railway operator Central Japan Railway Co. gained 0.87 percent and Chugai Pharmaceutical Co. rose 1.56 percent.

Kubota Corp. gained 1.37 percent after Credit Suisse Securities (Japan) Ltd. raised its investment rating for the construction machinery maker.

Also on the positive side were clothing retailer Fast Retailing Co. and Sumitomo Realty & Development Co.

In index futures trading on the Osaka Exchange, the key March contract on the Nikkei average fell 170 points to end at 21,420.