Business / Financial Markets | TSE DATA & REPORT

Nikkei tumbles to two-month closing low on earnings concerns

JIJI

Stocks nose-dived Tuesday on the Tokyo Stock Exchange, hurt by position-adjustment selling and growing concerns over corporate earnings, with the benchmark Nikkei 225 average closing at its lowest level in more than two months.

The Nikkei tumbled 604.04 points, or 2.67 percent, to end at 22,010.78, the lowest closing level since Aug. 13, after briefly falling below the 22,000 line. On Monday, the key market gauge gained 82.74 points.

The Topix, which covers all first-section issues on the Tokyo Stock Exchange, closed 44.59 points, or 2.63 percent, lower at 1,650.72, the lowest finish since Sept. 15 last year. It rose 2.46 points Monday.

Selling outpaced buying from the outset of Tuesday’s session on the heels of weak U.S. and European equities, brokers said.

The market accelerated its downswing later, with investor sentiment dampened by lower U.S. stock index futures in off-hours trading and the sluggish performance of Shanghai stocks.

“Concerns over earnings reports rapidly grew among investors,” an official of a bank-affiliated securities firm said, noting weaker than expected business results released this week by some major companies, including Kawasaki Heavy.

Selling by major funds may have hit the market, said Mitsuo Shimizu, chief strategist at Aizawa Securities Co.

On top of the earnings worries, uncertainties over external factors, including the U.S.-China trade friction and developments related to the alleged murder of a Saudi journalist, left investors increasingly risk-averse, brokers said.

“Earnings releases will be the key” for the course of the Tokyo market, the official of the bank-affiliated securities firm said.

Falling issues far outnumbered rising ones 2,015 to 79 in the first section, while 14 issues were unchanged.

Volume increased to 1.405 billion shares from 1.135 billion Monday.

Lixil plunged 15.76 percent after the housing equipment maker announced Monday a downward revision to its consolidated operating profit forecast for the year through March 2019.

Hitachi Chemical met with selling after the company’s April-September earnings, released Monday, failed to impress investors, brokers said.

Other major losers included mobile phone carrier SoftBank Group and game maker Nintendo.

On the other hand, electric appliance maker Casio and beverage producer Kirin Holdings were buoyant.