Business / Financial Markets | TSE DATA & REPORT

Tokyo stocks drop amid U.S.-China tensions

JIJI

Stocks lost ground on the Tokyo Stock Exchange on Thursday, dragged down by lingering concerns over U.S.-China trade tensions.

The 225-issue Nikkei average fell 132.23 points, or 0.62 percent, to end at 21,151.14. On Wednesday, the bellwether index rose 10.92 points.

The Topix index of all first-section issues finished down 5.63 points, or 0.36 percent, at 1,540.58, after losing 4.09 points the previous day. It dropped for the third straight day.

After getting off to a weaker start, the Nikkei lost over 200 points briefly in the morning, with the market falling prey to bouts of selling unleashed by the yen’s firming, as well as by an overnight drop in U.S. stocks reflecting investor concerns that the U.S.-China trade dispute may drag on, brokers said.

The trade concerns were fueled by a media report that the U.S. government is considering trade restrictions on more Chinese companies, including major surveillance equipment-maker Hangzhou Hikvision Digital Technology, on top of telecommunications equipment-maker Huawei Technologies, they said.

The market showed some resilience in the afternoon on the back of buybacks, but was unable to wipe out its earlier loss, with both the Nikkei and the Topix staying in negative territory throughout the day.

Stocks cut their losses in the afternoon thanks to expectations that U.S. President Donald Trump and Chinese President Xi Jinping will have a bilateral meeting on the fringes of the Group of 20 summit in the city of Osaka, which will be held on June 28 and 29, market sources said.

During a U.S. House of Representatives committee meeting on Wednesday, U.S. Treasury Secretary Steven Mnuchin said that Trump and Xi are highly likely to hold talks in late June.

Hiroaki Kuramochi, chief market analyst at Saxo Bank Securities Ltd., said that trading was slow in the afternoon session as “investors retreated to the sidelines” and waited for Trump or Xi to make any comments on trade talks between their countries.

Falling issues outnumbered rising ones 1,258 to 783 on the TSE’s first section, while 100 issues were unchanged.

Volume decreased to 1.16 billion shares from Wednesday’s 1.2 billion shares.

Semiconductor-related companies and electronic component-makers tumbled due to concerns over an escalation in the U.S.-China trade war. They included Tokyo Electron, TDK and Advantest.

General contractors, including Taisei and Shimizu, dropped on a media report that combined order receipts by eight major players in the industry in fiscal 2019 are expected to decline over 10 percent from the previous year.

Other losers included technology investor SoftBank Group and Mitsui Mining & Smelting.

Furniture retailer Nitori jumped 3.46 percent after announcing on Wednesday that its same-store sales in May increased 5.6 percent year on year, up for the third straight month.

Also on the sunny side were cosmetics maker Fancl and seafood producer Maruha Nichiro.

In index futures trading on the Osaka Exchange, the key June contract on the Nikkei average went down 180 points to 21,100.