Business / Financial Markets | TSE DATA & REPORT

Tokyo stocks follow Wall Street into negative territory

JIJI

Stocks turned lower Tuesday, hurt by an overnight drop of U.S. equities.

The Nikkei 225 average finished down 29.28 points, or 0.14 percent, at 21,272.45. On Monday, it rose 51.64 points.

The Topix, which covers all first-section issues on the Tokyo Stock Exchange, fell 4.62 points, or 0.30 percent, to end at 1,550.30 after gaining 0.67 point Monday.

Both indexes declined for the first time in three market days.

The Nikkei dipped soon after the opening and stayed in negative territory throughout the morning session, after all three key U.S. stock indexes dropped Monday.

The Wall Street slump came as Google and some other companies are reported to be planning to stop dealing with China’s Huawei Technologies after U.S. President Donald Trump, apparently targeting Huawei, signed an executive order last week to ban the use of foreign communications equipment that could seriously jeopardize U.S. national security, brokers said.

The Nikkei briefly pared its losses and entered into positive territory in the afternoon, backed by a rise in Shanghai shares, they said.

But it fell back later, due to a dearth of positive incentives, while its downside was supported by stability in dollar-yen rates, market sources said.

Ryuta Otsuka, strategist at the investment information department of Toyo Securities Co., said the advance of Shanghai equities reflected bullish remarks made by Huawei Chief Executive Officer Ren Zhengfei in an interview with state-run China Central Television.

In the interview, Ren said the United States is underestimating the company’s capabilities and that the firm is prepared for the U.S. ban.

The Nikkei failed to extend its gain in the afternoon, however, amid growing skepticism about Ren’s bullish view, Otsuka said.

Falling issues outnumbered rising ones 1,320 to 743 on the first section, while 78 issues were unchanged.

Volume increased to 1.254 billion shares from 1.178 billion Monday.

Technology companies dropped on selling triggered by the U.S. sanctions on Huawei. They included Sony, Tokyo Electron, TDK and Murata Manufacturing.

Shipping firm Mitsui O.S.K. Lines dropped for the first time in three trading days.

Among other losers were oil distributor Cosmo Energy, apartment rental firm Leopalace21 and online fashion mall operator Zozo.

Technology investor SoftBank Group gained 3.53 percent after U.S. Federal Communications Commission Chairman Ajit Pai on Monday showed support for the planned merger of fourth-ranking U.S. mobile phone carrier Sprint, which is affiliated with SoftBank, and third-ranking T-Mobile.

Other winners included clothing store chain operator Fast Retailing and Kyoei Steel.