Tokyo stocks turned sharply lower Wednesday amid persistent coronavirus fears, causing the benchmark Nikkei average hit the worst closing level in over 14 months.
The 225-issue Nikkei average plunged 451.06 points, or 2.27 percent, to end at 19,416.06, the lowest finish since Dec. 26, 2018. It soared 168.36 points Tuesday.
The Topix index of all Tokyo Stock Exchange first-section issues closed at 1,385.12, down 21.56 points, or 1.53 percent, after gaining 17.71 points the previous day.
Stocks got off to a dismal start, despite the U.S. Dow Jones industrial average’s third-biggest point gain Tuesday thanks to growing hopes for the U.S. government’s payroll tax cut and other measures to mitigate damage from the novel coronavirus outbreak on the economy.
Although the market showed some resilience around midmorning on the back of the yen’s weakening against the dollar, selling pressure built up again in the afternoon as U.S. stock index futures took a dive in off-hours trading, brokers said.
Participants in the Tokyo market failed to take a cue for buying from the proposed U.S. move to fight the virus, as details of the measures were not shown at Tuesday’s news conference.
“Hope for the economic measures turned to disappointment,” said Yutaka Miura, senior technical analyst at Mizuho Securities Co.
The Nikkei suffered larger losses than the Topix as the key indicator’s heavily weighted components, such as technology investor SoftBank Group, were hit particularly hard by selling, brokers said.
On the TSE’s first section, falling issues outnumbered rising ones 1,718 to 393 while 54 issues were unchanged. Volume decreased to 1.996 billion shares from Tuesday’s 2.570 billion shares.
Realtors were noticeably lower, with Mitsui Fudosan tumbling 3.8 percent and Mitsubishi Estate 3.2 percent.
Railway operator JR Central succumbed to selling on a sharp decline in passenger traffic so far in March due to the coronavirus outbreak.
Among the Nikkei components, chipmaking gear manufacturer Tokyo Electron plummeted 5.4 percent and SoftBank Group 3.6 percent.
Meanwhile, tiremakers including Bridgestone and Toyo Tire attracted purchases as the recent crude oil price fall is expected to help them curb spending for materials and push up earnings.
Drug store chain operator Sugi Holdings rose for strong same-store sales in February.
Also on the positive side were cosmetics giant Shiseido and Tokyo Gas.
In index futures trading on the Osaka Exchange, the key March contract on the Nikkei average went down 440 points to end at 19,370.
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