Tokyo stocks slid Monday, the first day of trading in 2021, as market sentiment was dampened by the prospect of another state of emergency over the novel coronavirus epidemic in Japan.

The 225-issue Nikkei average of the Tokyo Stock Exchange fell 185.79 points, or 0.68%, to close at 27,258.38. On Wednesday, the last trading day in 2020, the benchmark index fell 123.98 points.

The Topix index of all first section issues dropped 10.09 points, or 0.56%, to finish at 1,794.59. The index sank 14.50 points the previous trading day.

Despite opening above the 2020 close, the key indexes tumbled in early morning trading due to concerns that the government may declare another state of emergency in the Tokyo metropolitan area due to the resurgence of coronavirus infections.

But stocks pared losses somewhat through late morning as investors bought on dips, brokers said. Then the indexes moved little in the afternoon, with market players retreating to the sidelines.

Kazuo Kamitani, senior associate at Nomura Securities Co.’s Investment Research & Investor Services Department, said that trading was quiet Monday as investors were taking a wait-and-see attitude ahead of the U.S. Senate runoff elections in the state of Georgia the following day.

“Predictions of a ‘blue wave’ (of Democratic candidates winning both runoff races) have receded, and the expected control of the Senate and House of Representatives by different parties has been incorporated into investors’ actions,” Hirohumi Yamamoto, strategist at Toyo Securities Co., said.

Yamamoto added that the market’s resilience from late morning was aided by buy orders from institutional investors who were unable to adjust their positions during the final trading days of 2020, when the Nikkei shot up to the highest level in more than 30 years above 27,000.

Falling issues far outnumbered rising ones 1,629 to 495 in the TSE first section, while 63 issues were unchanged. Volume increased to 956 million shares from Wednesday’s 878 million shares.

Concerns over another state of emergency declaration have prompted market players to sell department store issues, with J. Front Retailing and Isetan Mitsukoshi plunging 4.79% and 4.10%, respectively.

Other industry sectors that suffered drops due to emergency declaration worries included railway operators, airlines and travel agencies.

On the other hand, the information technology sector attracted buying, including internet advertising firm CyberAgent and Nippon Telegraph and Telephone.

Medical information provider M3 surged 4.49%.

In index futures trading on the Osaka Exchange, the key March contract on the Nikkei average fell 150 points to 27,320.

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