Business / Financial Markets | TSE DATA & REPORT

Tokyo stocks take sharp downturn on profit-taking

JIJI

Stocks fell back sharply on the Tokyo Stock Exchange on Wednesday, hit by selling to cash in gains following the previous day’s surge.

The 225-issue Nikkei average gave up 213.45 points, or 0.99 percent, to end at 21,290.24. Tuesday, the key market gauge soared 378.60 points.

The Topix index of all first-section issues finished down 13.41 points, or 0.84 percent, at 1,592.07, after climbing 24.04 points the previous day.

The market got off to a weak start and accelerated its downswing around midmorning as investors stepped up profit-taking in view of sluggish movements of Chinese equities, market sources said.

In the afternoon, stocks resisted dropping further, although they remained deep in negative territory.

Small-lot selling by individual players hit wide-ranging issues, an official of a bank-affiliated securities firm said.

Yoshihiko Tabei, chief analyst at Naito Securities Co., pointed out that the U.K. Parliament’s rejection on Tuesday of Prime Minister Theresa May’s revised Brexit deal weighed down the market, as the move made murkier the situation surrounding the U.K.’s proposed exit from the European Union.

Masahiro Ichikawa, senior strategist at Sumitomo Mitsui Asset Management Co., said that the market showed some resilience in the afternoon, with “long-term players seeing no reason to sell.”

The market’s downside was supported by hopes for the Bank of Japan’s purchase of exchange-traded funds, Ichikawa added.

Falling issues far outnumbered rising ones 1,648 to 411 in the TSE’s first section, while 75 issues were unchanged.

Volume inched down to 1.225 billion shares from Tuesday’s 1.231 billion shares.

Control equipment maker Omron Corp. dived 5.96 percent, falling an easy prey to profit takers following its recent spurt.

Other big losers included electronic parts supplier Murata Manufacturing Co., chipmaking equipment maker Tokyo Electron, mobile phone carrier KDDI Corp. and clothing retailer Fast Retailing Co.

By contrast, Shin-Etsu Chemical Co., a supplier of semiconductor-related materials, attracted purchases on its announcement of own-share buybacks.

Also bought were Japan Tobacco Inc. and advertising agency Dentsu Inc.

In index futures trading on the Osaka Exchange, the key June contract on the Nikkei average plummeted 280 points to finish at 21,050.