Tokyo stocks took a beating on Thursday as profit-taking and concerns about the coronavirus pandemic sent the benchmark Nikkei average tumbling through the 19,000 line.
The Nikkei average of 225 selected issues listed on the first section of the Tokyo Stock Exchange plunged 882.03 points, or 4.51 percent, to close at 18,664.60 after surging 1,454.28 points on Wednesday to retake 19,000 for the first time in two weeks.
The Topix index of all first-section issues dropped 25.30 points, or 1.78 percent, to 1,399.32 following a 91.52-point climb the previous day.
Weighed down by profit-taking and concerns over the spreading virus that causes COVID-19, Tokyo’s market got off to a weak start as the Nikkei briefly lost over 900 points.
Investors were concerned about the damage the ever-spreading virus has inflicted on earnings, following downward revisions of estimates announced Wednesday by trading house Marubeni and electronics maker TDK, brokers said.
The Nikkei appeared to drop more sharply than the Topix because of plunges in technology investor SoftBank Group and clothing chain Fast Retailing, which are both heavily weighted components of the key index.
Aided by more potential purchases of exchange-traded funds by the Bank of Japan, both indexes fluctuated within relatively narrow ranges for the majority of the afternoon.
The market then succumbed to heightened selling pressure in late trading, pushing the Nikkei down more than 1,000 points at one point.
Investor sentiment was also dampened by Tokyo Gov. Yuriko Koike’s request Wednesday that residents in the capital refrain from leaving home this weekend for errands that aren’t urgent, Tomoaki Fujii, head of the investment research division at Akatsuki Securities Inc., noted.
“Market players reacted negatively to Koike’s request as they had believed that Japan has prevented the spread of the virus relatively well up until now,” Yutaka Miura, senior technical analyst at Mizuho Securities Co., said.
Falling issues far outnumbered rising ones 1,226 to 897, while 45 issues were unchanged. Volume fell to 2.049 billion shares from Wednesday’s 2.280 billion.
Marubeni dived 11.79 percent after it said it expects to log a record net loss of ¥190 billion for the year ending Tuesday, versus its previous projection of a ¥200 billion profit. The trading house said it was hit by falls in crude oil prices caused by the outbreak.
Other major trading houses, including Sumitomo and Mitsubishi, also met with selling.
TDK plunged 8.72 percent in response to downward revisions of its operating and net profit estimates for the year ending this month.
Among other major losers were advertising giant Dentsu Group and job information service firm Recruit Holdings.
On the other hand, major winners included frozen food producer Nichirei and daily goods maker Kao.
In index futures trading on the Osaka Exchange, the key June contract on the Nikkei average dived 880 points to end at 18,360.