Stocks nose-dived on the Tokyo Stock Exchange Friday over rekindled fears about a global economic slowdown, forcing the benchmark Nikkei average to give up more than 400 points.
The 225-issue average tumbled 430.45 points, or 2.01 percent, to end at 21,025.56, after breaching the 21,000 line for the first time since Feb. 15 on an intraday basis. On Thursday, the Nikkei fell 140.80 points.
The Topix index of all first-section issues finished down 29.22 points, or 1.82 percent, at 1,572.44, after losing 13.59 points the previous day.
Stocks fell sharply right after the opening bell, hit by heavy risk-averse selling spurred by overnight sell-offs in the European and U.S. markets.
Investors shied away from stocks and other risk assets in the wake of the European Central Bank sharply cutting its growth forecasts for the eurozone on Thursday. The ECB also decided at its policy-setting meeting to start a new program to supply liquidity to the banking system and refrain from raising interest rates this year.
The ECB moves hurt market sentiment, which had already been soured since China lowered its 2019 growth target, brokers said.
Stocks accelerated their downswings after the release of export data by China that were far weaker than expected, they also said.
Many participants cited the yen’s strengthening against the dollar as another damper to the market.
Ryuta Otsuka, strategist at the investment information department of Toyo Securities Co., said stocks were “sold excessively,” observing that investors overreacted to the projected slowdown in the EU economy, which was something that had already been expected.
Investor attention has shifted from rosy events to dismal ones, including not only macroeconomic developments but domestic corporate activities, such as a big chip production cut by Renesas Electronics Corp. and Mizuho Financial Group Inc.’s profit warning, said Masayuki Otani, chief market analyst at Securities Japan Inc.
Falling issues overwhelmed rising ones 2,003 to 107 in the TSE’s first section, while 23 issues were unchanged.
Volume swelled to 1.67 billion shares from Thursday’s 1.25 billion shares, thanks partly to active transactions linked to the fixing of special quotations to settle March index futures and option contracts.
Financials were battered by drops in U.S. long-term interest rates. Megabank group Mitsubishi UFJ lost 2.25 percent, and insurer Dai-ichi Life plunged 4.78 percent.
Kawasaki Kisen dived 12.63 percent after the shipping firm sharply lowered its net profit estimate for the year ending this month.
Other major losers included clothing store chain Fast Retailing and chipmaking gear manufacturer Tokyo Electron.
Among the handful winners was Sekisui House, which gained 1.42 percent on strong earnings.
In index futures trading on the Osaka Exchange, the key June contract on the Nikkei average tumbled 460 points to end at 20,770.
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