Tokyo stocks ended in negative territory on Tuesday, despite starting out on the sunny side, as the market succumbed to selling attributed in part to lackluster performances of Chinese stocks.
The 225-issue Nikkei average gave up 255.33 points, or 0.86%, to finish at 29,408.17, after surging 697.49 points Monday.
The Topix index of all first section issues closed 7.63 points, or 0.40%, lower at 1,894.85, following a 37.99-point climb the previous day.
The Tokyo market opened higher, reassured by the Dow Jones Industrial Average’s biggest one-day rise since November last year on Monday, thanks to a respite in U.S. long-term interest rates’ surge.
Buying interest was also stimulated by a better-than-expected U.S. manufacturing purchasing managers’ index for February, released by the Institute for Supply Management, and by the U.S. Food and Drug Administration’s emergency use authorization of a novel coronavirus vaccine developed by U.S. health care giant Johnson & Johnson, brokers said.
Reflecting a fall in Dow futures in off-hours trading, however, market players engaged in selling to lock in profits later in the morning, causing the Nikkei and Topix indexes to dive into negative territory.
The Tokyo market continued to move in the minus side in the afternoon, weighed down by drops in Chinese stocks.
“Profit-taking pressure mounted (from the late morning) as the Nikkei approached the 30,000 line,” Masahiro Ichikawa, chief market strategist at Sumitomo Mitsui DS Asset Management Co., said.
Ichikawa said that the situation concerning the benchmark 10-year U.S. Treasury yield, which surged late last week and cause plunges on Wall Street and on the Tokyo market, must “first and foremost completely calm down” in order for stock prices to bounce back.
In the TSE first section, falling issues overwhelmed rising ones 1,346 to 745 while 103 issues stayed unchanged. Volume inched up to 1.292 billion shares from Monday’s 1.250 billion shares.
Wood products supplier Sumitomo Forestry was among major victims of profit-taking.
Z Holdings, the parent of internet service provider Yahoo Japan, plummeted 4.82% after merging with messaging app provider Line Corp. on Monday. Many market players moved to sell shares of the company as the newly reborn company’s competitiveness against U.S. technology giants collectively called GAFA and against Chinese e-commerce powerhouse Alibaba Group Holding was called into question, market sources said.
Control equipment-maker Omron and drugmaker Chugai also succumbed to selling.
On the other hand, seasoning producer Ajinomoto and toilet-maker Toto were among a handful of gainers.
In index futures trading on the Osaka Exchange, the key March contract on the Nikkei average lost 90 points to end at 29,490.
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