Tokyo stocks turned down Monday, pressured by profit-taking and weaker U.S. index futures.
The 225-issue Nikkei average of the Tokyo Stock Exchange shed 259.64 points, or 0.92%, to finish at 27,824.83, after rallying 636.46 points Friday.
The Topix index of all TSE first section issues ended 4.56 points, or 0.24%, lower at 1,878.86, following a 34.38-point rise the previous market day.
The market opened higher, in the wake of all three major U.S. price indexes including the Dow Jones Industrial Average extending gains Friday. But it soon met with selling to lock in profits.
A downturn in Dow futures in off-hours trading also dampened sentiment.
“Market participants accelerated selling because they were disappointed by the Nikkei’s failure to recover fully from its free-fall last week,” said Masayuki Otani, chief market analyst at Securities Japan Inc.
The market could not extend gains unlike Wall Street, as investors grew risk-averse in view of an expansion of the coronavirus state of emergency to cover three more prefectures in Japan, a tardy vaccine rollout in the country and the virus’s resurgence in other parts of Asia, brokers said.
“With the domestic earning season almost over, players had few reasons to buy,” said Masahiro Ichikawa, chief market strategist at Sumitomo Mitsui DS Asset Management Co.
On the TSE first section, decliners outnumbered gainers 1,211 to 908 while 73 issues were unchanged. Volume shrank to 1.164 billion shares from Friday’s 1.266 billion shares.
The Nikkei’s heavily weighted components, in particular, were hit by profit-taking. Among them were closing retailer Fast Retailing and technology investor SoftBank Group.
The semiconductor sector dived, with production gear-maker Tokyo Electron tumbling 3.68% and peer Screen 3.38%.
Seven & I plunged on fears that the Japanese retail group’s proposed buyout of U.S. convenience store chain Speedway may be blocked by local antitrust authorities.
On the other hand, automakers, such as Toyota and Yamaha Motor, attracted purchases along with realtors and airlines.
In index futures trading on the Osaka Exchange, the key June contract on the Nikkei average retreated 270 points to end at 27,770.
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