Business / Financial Markets

Tokyo stocks take another tumble on consecutive Wall Street plunges

Jiji

The sell-off in Tokyo stocks deepened Thursday in the wake of a back-to-back plunges in theU.S. market amid growing concerns about a prolonged pandemic-caused recession.

The Nikkei average of 225 selected issues on the first section of the Tokyo Stock Exchange dived 352.27 points, or 1.74 percent, to end at 19,914.78, its first finish below 20,000 since May 7. On Wednesday, the key market gauge lost 99.43 points.

The Topix index of all first-section issues tumbled 28.14 points, or 1.91 percent, to 1,446.55, following a 2.03-point drop the previous day.

The Tokyo market opened substantially lower after the U.S. Dow Jones industrial average fell over 2 percent to extend its losses Wednesday in response to Federal Reserve Chairman Jerome Powell’s remarks in a speech suggesting the possibility of the U.S. economy recovering from the coronavirus crisis more slowly than expected, brokers said.

Although stocks showed some resilience during the morning session thanks to what is believed to be the Bank of Japan’s buying of exchange-traded funds, they came under renewed selling pressure in the afternoon as U.S. index futures went further down in off-hours trading, they noted.

“Worries about a prolonged economic slump spilled over to the Tokyo market, prompting short-term players to enhance futures-linked selling,” said Hirohumi Yamamoto, strategist at Toyo Securities Co.

“In view of a second wave of coronavirus infections abroad, some investors moved to cash out equities after the Nikkei topped 20,000,” an asset manager said.

On the first section, falling issues trounced rising ones 1,952 to 190 while 29 issues were unchanged. Volume increased to 1.329 billion shares from Wednesday’s 1.319 billion shares.

The soured U.S. economic prospect dampened automaker Toyota, electronics firm Hitachi and other export-oriented stocks.

A drop in crude oil prices tainted oil names such as JXTG and Idemitsu.

Sony went into a free fall after the technology and entertainment firm’s operating profit for the year that ended in March failed to beat a market consensus.

Technology investor SoftBank Group and industrial robot producer Fanuc plummeted.

Meanwhile, drug makers including Eisai and Takeda attracted defensive demand.

Also in the green were mobile phone carrier KDDI and cosmetics giant Shiseido.

In index futures trading on the Osaka Exchange, the key June contract on the Nikkei average dropped 570 points to end at 19,780.

Coronavirus banner