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Tokyo stocks fell further Wednesday, with investors remaining wary of the outcome of the U.S. Federal Reserve’s policy-setting meeting and a possible collapse of Chinese real estate conglomerate Evergrande Group.

The 225-issue Nikkei average dropped 200.31 points, or 0.67%, to finish at 29,639.40, extending its loss after tumbling 660.34 points Tuesday.

The Topix index of all Tokyo Stock Exchange first-section issues ended down 21.00 points, or 1.02%, at 2,043.55, following a 35.62-point drop the previous day.

Stocks got off to a weak start, weighed down by unabated default fears over heavily indebted China Evergrande Group.

A media report that Evergrande is set to make a bond interest payment Thursday pushed up the market later in the morning. But active buying proved short-lived, with investors retreating to the sidelines to wait for the outcome of the Fed’s two-day Federal Open Market Committee (FOMC) meeting ending later in the day, brokers said.

Both the Nikkei and Topix indexes remained in negative territory throughout the afternoon session amid a dearth of fresh market-friendly events.

“Although the interest payment news soothed investors’ anxieties to some extent, it did not wipe out their concerns over the Evergrande crisis,” said Masahiro Ichikawa, chief market strategist at Sumitomo Mitsui DS Asset Management Co.

Echoing Ichikawa, Chihiro Ota, general manager for investment research and investor services at SMBC Nikko Securities Inc., noted that “even if the company actually meets the payment due, it will still be on the verge of collapse.”

“Active buying was held in check not only because investors hoped to learn the outcome of the FOMC meeting but also because the Tokyo market will be closed Thursday for a national holiday,” he added.

Meanwhile, Maki Sawada, strategist at Nomura Securities Co., suggested that the market was not necessarily dominated by risk-averse selling, pointing out that players hunted stocks, including some major components of the Nikkei average, which plummeted the previous day.

On the TSE’s first section, decliners trounced gainers 1,847 to 287, while 53 issues were unchanged. Volume dropped to 1.2 billion shares from Tuesday’s 1.32 billion shares.

Firms with high exposure to the Chinese market met with continued selling. Among them were Hitachi Construction Machinery, down 2.98%, air conditioner-maker Daikin, down 2.94%, industrial robot producer Fanuc, down 2.78%, and machine tool manufacturer Okuma, down 2.13%.

Silicon wafer producer Shin-Etsu Chemical dropped 2.50%, reflecting the semiconductor sector’s weakness.

Banks, including Mizuho Financial, were broadly sold.

Oracle Japan jumped 5.76% after it reported Tuesday a sharp rise in its June-August operating profit.

Major shipping firms attracted buying, with Kawasaki Kisen gaining 3.28%.

Technology investor SoftBank Group and clothing retailer Fast Retailing, both major components of the Nikkei, rose 1.90% and 1.79%, respectively.

In index futures trading on the Osaka Exchange, the key December contract on the Nikkei average fell 240 points to end at 29,520.

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