Tokyo stocks dive on reignited U.S.-China trade fears

JIJI

Stocks fell sharply on the Tokyo Stock Exchange on Thursday, hurt by rekindled concerns over fierce U.S.-China trade friction.

The 225-issue Nikkei average plunged 417.71 points, or 1.91 percent, to end at 21,501.62, the lowest finish since Oct. 30. It shed 116.72 points on Wednesday.

The Topix index of all first-section issues finished down 29.89 points, or 1.82 percent, at 1,610.60, after losing 8.71 points the previous day.

Stocks came under heavy selling pressure soon after the opening bell, with investor sentiment battered by news reports that Meng Wanzhou, chief financial officer of Chinese telecommunications giant Huawei Technologies Co., has been arrested in Canada at the request of the United States, market sources said.

Concerns grew that the arrest, on suspicion of violating U.S. sanctions against Iran, may intensify a U.S.-China trade dispute, according to the sources.

The Nikkei briefly lost over 600 points in afternoon trading.

An official at an asset management firm said that sharp sell-offs were induced by worries that the arrest of Wanzhou “may have adverse effects on U.S.-China trade negotiations.”

Brokers said that high-tech issues suffered massive losses following the new reports on her arrest.

Active “buying on dips didn’t easily emerge” due to uncertainty over future developments of an investigation involving the key Huawei official, said Tomoaki Fujii, head of the investment research division at Akatsuki Securities Inc.

Referring to the closure of the U.S. bond and stock markets on Wednesday, Fujii noted that the Tokyo market was driven down by futures-led selling in the absence of foreign investors.

Falling issues far outnumbered rising ones 1,828 to 253 in the TSE’s first section, while 38 issues were unchanged.

Volume rose to 1.510 billion shares from 1.463 billion shares on Wednesday.

High-tech issues, including semiconductor-related Tokyo Electron, Sumco and Shin-Etsu Chemical, ended sharply lower.

Nippon Steel & Sumitomo Metal, industrial robot producer Fanuc and other economically sensitive names met with selling due to U.S.-China trade fears, brokers said.

Other major losers included mobile phone carrier SoftBank Group and clothing retailer Fast Retailing.

By contrast, convenience store operator FamilyMart Uny attracted buying as a defensive name, brokers said.

Also on the plus side were Tokyo Gas and Tokai Carbon.

In index futures trading on the Osaka Exchange, the key December contract on the Nikkei average fell 430 points to 21,450.