Tokyo stocks tumbled Tuesday, with the benchmark Nikkei 225 average sliding to a two-month low amid lingering worries over geopolitical risks and ahead of the corporate earnings report season.
The Nikkei ended down 604.04 points, or 2.67 percent, from Monday at 22,010.78. The Topix, which covers all first-section issues on the Tokyo Stock Exchange, finished 44.59 points, or 2.63 percent, lower at 1,650.72.
“Geopolitical risks linked to the EU and the Middle East dragged down share prices, extending falls on New York’s Dow,” Okasan Online Securities said in a commentary.
The falls in Tokyo came after another volatile day of trading on Wall Street, in which major indices extended losses, with the looming U.S. congressional elections also making for rough seas.
“Selling hit financial stocks in New York, dampening sentiment,” said Mutsumi Kagawa, chief global strategist at Rakuten Securities.
“Caution has also risen due to recent rising volatility after New York stocks powered to their highest-ever levels and the Nikkei hit its 27-year high,” he said.
Market players are waiting for Japanese corporate results while watching U.S. earnings results coming out now, he said.
Every industry category in the main section lost ground, led by metal product, construction, and glass and ceramics product issues.
Housing equipment producer Lixil Group plunged ¥325, or 15.8 percent, to ¥1,737 after the company on Monday lowered its group net profit outlook for the current business year through March.
“Sluggish corporate earnings reports including Lixil Group dented investors’ risk appetite as they had expected good earnings results and outlooks from Japanese firms,” Shimizu added.
The yen’s advance against the dollar also capped the upside of export-related issues, brokers said.
On the first section, 2,015 issues (over 95 percent of the total) lost ground, while only 79 advanced and 14 ended the day unchanged.
Companies dependent on business in China met heavy selling following a drop in Chinese equities, with Hitachi Construction Machinery falling ¥170, or 5.0 percent, to ¥3,235 and Yaskawa Electric dropping ¥125, or 3.8 percent, to ¥3,185.
Trading volume on the main section rose to 1.405 billion shares from 1.135 billion Monday.