Tokyo stocks fell back sharply Monday as a risk-averse mood grew after the latest crude oil output curb agreement reached by the world’s major oil-producing nations failed to meet investor expectations.

The Nikkei average of 225 selected issues listed on the first section of the Tokyo Stock Exchange plunged 455.10 points, or 2.33 percent, to end at 19,043.40, On Friday, the key market gauge gained 152.73 points.

The Topix index of all first-section issues dived 24.13 points, or 1.69 percent, to 1,405.91, after adding 13.06 points the previous trading day.

Selling outpaced buying from the outset after the members of the Organization of the Petroleum Exporting Countries and their allies, called OPEC Plus, agreed Sunday to cut crude oil production by 9.7 million barrels per day.

Despite the agreement on the historic output cut, U.S. stock index futures sank deep into negative territory in off-hours trading to put downward pressure on the Tokyo market, reflecting the investor view that the reduction amount is not enough to cope with sharp oil demand deterioration caused by the novel coronavirus pandemic, brokers said.

The market accelerated its downswing in the afternoon, also weighed down by the yen’s strengthening against the dollar.

“In the afternoon, selling hit Tokyo futures first and then cash stocks on speculation that the Bank of Japan failed to buy exchange-traded funds despite the market’s drop in the morning,” said Ryuta Otsuka, strategist at the investment information department of Toyo Securities Co.

With the ongoing coronavirus outbreak in Japan keeping investors worried about domestic companies’ earnings, stocks were unable to head north, another brokerage house official said.

Price fluctuations were exaggerated in thin trading brought on by the absence of many foreign investors due to the Easter weekend abroad, some market players said.

On the TSE’s first section, falling issues far outnumbered rising ones 1,740 to 380 while 49 issues were unchanged. Volume dropped to 1.056 billion shares from Friday’s 1.370 billion shares.

Shipping firms came under heavy selling pressure, with Mitsui O.S.K. plunging 4.83 percent and Kawasaki Kisen 4.19 percent.

Recruit Holdings tumbled following media reports that the job information service firm has asked three Japanese mega-banks to set credit lines worth over ¥400 billion.

Among other losers were clothing store chain Fast Retailing and technology investor Softbank Group.

Meanwhile, Yaskawa Electric was hunted after the industrial robot producer’s operating profit in the year that ended in February and operating profit projection for the March-May quarter beat market consensuses on Friday.

Also on the positive side were retail giant Aeon and drug maker Takeda,

In index futures trading on the Osaka Exchange, the key June contract on the Nikkei average fell 240 points to end at 19,070.

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.