The benchmark Nikkei average closed below 21,000 for the first time in more than two months on the Tokyo Stock Exchange on Thursday, with investor sentiment hurt by falls in overseas equities amid simmering U.S.-China trade tensions.
The 225-issue Nikkei average fell 60.84 points, or 0.29 percent, to end at 20,942.53, its first finish below the psychologically important line since March 25. Wednesday, the key market gauge lost 256.77 points.
The Topix index of all first section issues closed down 4.43 points, or 0.29 percent, at 1,531.98, after shedding 14.58 points the previous day.
The market got off to a weak start, after the Dow Jones Industrial Average extended losses in New York on Wednesday amid growing fears of a global economic slowdown stemming from the prolonged U.S.-China trade dispute, brokers said.
Also weighed down by a weak performance of Shanghai stocks, the Nikkei briefly lost over 190 points in the morning.
Tokyo stocks recouped some of their losses in the afternoon, helped by a weaker yen against the dollar and buying from value investors, brokers said.
“Economic uncertainty grew following the occurrence of a so-called yield curve inversion in the United States,” said Hiroaki Kuramochi, chief market analyst at Saxo Bank Securities Ltd.
“It’d be no surprise if more and more investors move to shift funds away from equity assets” amid persistent worries about a global economic slowdown, an official of a bank-affiliated securities firm said.
Falling issues outnumbered rising ones 1,094 to 960 in the TSE’s first section, while 86 issues were unchanged.
Volume decreased to 1.113 billion shares from 1.322 billion shares Wednesday.
Paper manufacturers headed noticeably lower, with Daio Paper Corp. ending down 2.61 percent, Nippon Paper Industries Co. down 2.45 percent and Oji Holdings Corp. down 1.89 percent.
Clothing chain store Fast Retailing Co. and technology investor Softbank Group Corp., both heavily weighted components of the Nikkei, met with selling, pushing down the index by a total of over 50 points.
Among other major losers were daily goods producer Kao Corp. and cosmetics maker Shiseido Co.
By contrast, Renesas Electronics Corp. jumped after Goldman Sachs Japan Co. revised up its investment rating for the semiconductor-maker.
Chipmaking gear manufacturer Tokyo Electron bounced back after recent sell-offs.
Also on the positive side were industrial robot producer Fanuc Corp. and control-equipment-maker Omron Corp.
In index futures trading on the Osaka Exchange, the key June contract on the Nikkei average dropped 20 points to end at 20,930.
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