Tokyo stocks extended losses Tuesday, driven by widespread fears of an economic slowdown stemming from the continuing spread of the new pneumonia-causing virus in China.

The Nikkei 225 average fell 127.80 points, or 0.55 percent, to end at 23,215.71 after plunging 483.67 points Monday.

The Topix, which covers all issues on the first section of the Tokyo Stock Exchange, fell 10.29 points, or 0.60 percent, to end at 1,692.28. It tumbled 27.87 points Monday.

The market opened lower on the heels of an overnight plunge on Wall Street that was attributed to weaker than expected new U.S. home sales in December and growing worries about a further spread of the deadly virus leading to a global economic slowdown, brokers said.

Slowdown fears were exacerbated by the Chinese government’s decision to extend the Lunar New Year holiday period to Sunday in an effort to contain the spread of the disease, brokers said.

But after the bout of selling ran its course, stocks showed resilience and trimmed early losses toward the close, helped by a halt in the yen’s strengthening against the dollar and a rise in U.S. stock index futures in off-hours trading, brokers said.

“A sense of caution over excessive losses supported the market’s downside, after the Nikkei neared its recent low on Jan. 8 (22,951) and fell below its 75-day moving average,” which stood at 23,218 as of Monday, said Masayuki Otani, chief market analyst at Securities Japan Inc.

Although the Nikkei stayed above 23,000, some market sources voiced caution over the new coronavirus.

“It took several months for SARS (severe acute respiratory syndrome) to wind down,” an official of a bank-affiliated securities firm said. “A further increase in the number of infected patients would hit market sentiment.”

Falling issues outnumbered rising ones 1,335 to 735 in the first section, while 89 issues were unchanged.

Volume fell to 1.171 billion shares from 1.180 billion Monday.

Slowdown fears battered China-linked names such as factory automation equipment maker Keyence, industrial robot producer Fanuc and construction machinery maker Komatsu.

Oil names including JXTG and Idemitsu fell further following a continuing drop in crude oil prices.

Among other major losers were air conditioner maker Daikin and job information service firm Recruit Holdings.

On the other hand, cosmetics maker Shiseido staged a sharp rebound after a plunge the previous day.

Also on the positive side were clothing store chain Fast Retailing and automaker Suzuki.

In a time of both misinformation and too much information, quality journalism is more crucial than ever.
By subscribing, you can help us get the story right.