Tokyo stocks succumbed to selling pressure for the eighth consecutive market day Wednesday, with investors staying vigilant against the fallout from the Evergrande crisis on the Chinese economy.
The 225-issue Nikkei average listed on the first section of the Tokyo Stock Exchange closed down 293.25 points, or 1.05%, at 27,528.87, after suffering a 622.77-point tumble Tuesday. The key index last posted an eight-session losing streak in July 2009.
The Topix index of all TSE first-section issues fell 5.84 points, or 0.30%, to finish at 1,941.91 in its eight-day slump, after falling 26.17 points the previous day.
The market got off to a strong start in response to a Wall Street rebound Tuesday on a better-than-expected reading of the Institute for Supply Management’s U.S. nonmanufacturing purchasing managers’ index for September.
But stocks soon erased their gains amid persistent concerns about the adverse impact of the debt crisis at China Evergrande Group on the Chinese economy, brokers said, adding that the downturn was chiefly led by short-term players’ futures-linked selling.
The Nikkei’s drop was more severe than the Topix’s because “the benchmark index’s component semiconductor and machinery issues were sold markedly in the process of the market pricing in the Chinese risks, including supply chain disruptions,” said Maki Sawada, strategist at Nomura Securities Co.
Continued worries over U.S. inflation and rising energy prices were other negative factors, she added.
Rises in U.S. long-term interest rates in pre-market trading dampened investor appetite for high-priced technology stocks, a brokerage firm official said.
Meanwhile, Chihiro Ota, general manager for investment research and investor services at SMBC Nikko Securities Inc., said overall sentiment was not necessarily grim.
“The market was polarized between gainers and losers,” Ota said. “The Nikkei’s plunge reflects the fact that many component stocks were on the losing side.”
On the TSE’s first section, gainers slightly outnumbered decliners 1,073 to 1,015 while 95 issues were unchanged.
Takeda sank 6.36% on its termination of Phase II clinical studies of a narcolepsy drug due to safety concerns.
Chip-linked issues Advantest and Taiyo Yuden shed 2.80% and 2.75%, respectively.
Automakers plunged on dimmer global economic outlook, with Nissan losing 5.59% and Toyota 3.26%.
Among heavily weighted Nikkei components, Fast Retailing dropped 3.10% and SoftBank Group 2.07%.
Other noticeable losers included airlines JAL and ANA, as well as department store operator J. Front Retailing.
On the other hand, Taiheiyo Cement rocketed 7.42% after announcing it will raise the price of cement in January next year.
Oil wholesaler Idemitsu soared 5.39% and resources developer Inpex climbed 3.50% as crude oil prices remained high.
The higher U.S. interest rates lifted banks and insurers, such as Mitsubishi UFJ and Dai-Ichi Life.
In index futures trading on the Osaka Exchange, the key December contract on the Nikkei average lost 330 points to end at 27,410.
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