Tokyo stocks turned markedly lower Tuesday, hit by active profit-taking amid growing concerns over the economic situations abroad.
The 225-issue Nikkei average of the Tokyo Stock Exchange fell 276.11 points, or 0.96%, to close at 28,546.18. On Monday, the benchmark index advanced 190.84 points.
The Topix index of all first section issues closed 14.00 points, or 0.75%, lower at 1,848.00 after gaining 5.36 points the previous day.
Selling to lock in profits gathered steam right after the opening bell, in the wake of a drop in the U.S. Dow Jones Industrial Average on Monday and Dow futures’ sluggish performance in off-hours trading.
Concerns grew over the U.S. economy as Democratic leaders suggested the possibility of President Joe Biden’s $1.9 trillion stimulus package to combat the coronavirus crisis not being passed without downsizing or as early as expected.
Dismal European economic data also pushed investors to secure profits for now.
Weighed down by falls in other Asian shares, Tokyo stocks sank deeper in negative terrain in the afternoon, forcing the Nikkei to give up some 300 points at one point.
On top of profit-taking, “position-squaring selling gathered momentum ahead of the start of the U.S. Federal Reserve’s two-day Federal Open Market Committee meeting through Wednesday,” Maki Sawada, strategist at Nomura Securities Co., said.
“The market was also dampened by growing uncertainties over the coronavirus vaccination situation in the United States following U.S. drugmaker Merck’s announcement that it will discontinue the development of two vaccines,” she added.
On the TSE first section, decliners outnumbered gainers 1,276 to 830 while 84 issues were unchanged. Volume rose slightly to 1.070 billion shares from Monday’s 1.016 billion shares.
Clothing store chain Fast Retailing, medical information provider M3 and air conditioner-maker Daikin were among major victims of profit-taking.
Game-maker Bandai Namco and industrial robot-maker Yaskawa Electric dived 4.64% and 3.43%, respectively.
On the other hand, drugmaker Takeda, which is conducting a clinical trial of a coronavirus vaccine developed by Moderna, rose 1.83%, after the U.S. pharmaceutical firm said the vaccine has proved effective against coronavirus variants found in Britain and South Africa.
In index futures trading on the Osaka Exchange, the key March contract on the Nikkei average lost 250 points to end at 28,530.
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