Tokyo stocks extended their losing streak to a third market day Friday, with technology-oriented shares in particular hit hard by selling on a broad front.
The Nikkei average of 225 selected issues listed on the first section of the Tokyo Stock Exchange gave up 276.01 points, or 0.98%, to close at 28,003.08, after plunging 329.40 points Thursday.
The Topix index of all TSE first-section issues ended down 7.42 points, or 0.38%, at 1,932.19, following a 23.55-point tumble the previous day.
Investors rushed to sell tech stocks, among others, immediately after the opening bell, in the wake of fallbacks in their U.S. industry peers on Thursday.
The benchmark Nikkei average plummeted more than 400 points in the first several minutes, also because Fast Retailing, the index’s most heavily weighted component, met with hefty selling after issuing the previous day a profit warning for the year ending August, brokers said.
But the market soon showed resilience, backed by bargain-hunting chiefly by individual investors.
The Nikkei failed to return to positive terrain, however, while the broader Topix index recouped its earlier losses to move around the previous day’s closing level for the rest of the session.
The initial market loss was cut as some economically sensitive cyclicals, such as shipping firms and steelmakers, attracted purchases, Maki Sawada, strategist at Nomura Securities Co., pointed out.
“Stronger-than-expected Chinese and U.S. economic indicators released Thursday have alleviated investors’ fears over a slowdown in the global economy,” Sawada said.
U.S. Federal Reserve Chairman Jerome Powell’s dovish comments suggesting the Fed’s quantitative easing tapering is still “ways off” at his congressional testimonies Wednesday and Thursday also “prompted investors to buy cyclicals,” said Masahiro Ichikawa, chief market strategist at Sumitomo Mitsui DS Asset Management Co.
But the market remained under pressure stemming in part from position-squaring activities ahead of a series of holidays next week and the start of the full quarterly earnings season in the final week of the month, Ichikawa added.
On the TSE first section, decliners slightly outnumbered gainers 1,058 to 1,008 while 126 issues were unchanged. Volume fell to 935 million shares from Thursday’s 971 million shares.
Drug maker Eisai tumbled 12.96% following media reports that two major U.S. medical institutions have decided not to use an Alzheimer’s disease drug developed jointly by the Japanese firm and its U.S. partner, Biogen.
Clothing store chain Fast Retailing dropped 2.61 %.
Chip stocks succumbed to selling pressure, with test device marker Advantest and manufacturing equipment producer Tokyo Electron, both heavyweight components of the Nikkei, losing 2.21 % and 1.62 %, respectively.
By contrast, shipping firms Kawasaki Kisen climbed 3.49 and Nippon Yusen 3.03 %.
Among other winners were automakers, including Nissan and Toyota, as well as steelmakers.
In index futures trading on the Osaka Exchange, the key September contract on the Nikkei average declined 290 points to end at 27,930.
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