Tokyo stocks continued to drop Tuesday, reflecting an overnight plunge on Wall Street against the backdrop of a historic tumble in crude oil prices.
The Nikkei 225 average lost 388.34 points, or 1.97 percent, to end at 19,280.78. On Monday, the benchmark index gave up 228.14 points.
The Topix, which covers all issues on the Tokyo Stock Exchange’s first section, closed 16.52 points, or 1.15 percent, lower at 1,415.89 after dropping 10.13 points Monday.
Stocks fell sharply in the morning as investors grew increasingly risk-averse in response to falls in the three major U.S. stock price gauges, including the Dow Jones Industrial Average, on Monday after the key West Texas Intermediate crude oil futures contract for May nose-dived and turned negative for the first time ever, brokers said.
Weighed down by a fall in the Dow futures in off-hours trading, the TSE continued to fluctuate deep in minus territory in the afternoon.
Uncertainty among investors over the global economic outlook amid the coronavirus pandemic were refueled by the plunge in crude oil prices, brokers said.
Meanwhile, Yutaka Miura, senior technical analyst at Mizuho Securities Co., noted that the afternoon’s drop came in response to a U.S. media report that North Korean leader Kim Jong Un was in grave condition after undergoing surgery.
“The market came under (further) selling pressure, reflecting mounting concerns over heightened tensions on the Korean Peninsula,” he added.
In the TSE’s first section, falling issues far outnumbered rising ones 1,554 to 552, while 62 issues were unchanged. Volume increased to 1.280 billion shares from 1.065 billion Monday.
Oil names Inpex and Idemitsu were met with selling, reflecting the crude oil dive.
Export-oriented issues, including Toyota and Sony, lost ground on concerns over a deterioration in their earnings, as worries about the course of the global economy heightened due to the crude oil plunge and the coronavirus crisis.
Textile maker Teijin shed 2.29 percent after Mitsubishi UFJ Morgan Stanley Securities Co. lowered its target stock price for the company.
On the other hand, biotech firm Takara Bio surged 10.40 percent thanks to a news report that the company will create a system to mass-produce a coronavirus vaccine that is currently under development.