Jiji Press
TOKYO (Jiji Press) — Stocks lost further ground on the Tokyo Stock Exchange on Wednesday following an overnight drop in U.S. equities, with the benchmark Nikkei average closing below 18,000 for the first time since Oct. 2.
The 225-issue Nikkei tumbled 343.74 points, or 1.89 percent, to finish at 17,891.00. On Tuesday, it lost 203.93 points.
The TOPIX index of all first-section issues was down 32.30 points, or 2.15 percent, at 1,470.83 after losing 12.00 points on Tuesday.
The U.S. Dow Jones industrial average dropped on Tuesday for the first time in eight market days on the back of growing worries about a Chinese economic slowdown. China’s dismal trade data for September, released Tuesday, dampened investor sentiment.
The Tokyo market remained under pressure as a risk-averse mood spread, brokers said, adding that the yen’s appreciation against the dollar fueled stock selling.
In afternoon trading, the Nikkei briefly expanded its loss to over 400 points.
“As the Nikkei fell below its 25-day moving average, regarded as a support line for the index, a negative atmosphere spread in the market,” said Yoshihiko Tabei, chief analyst at Naito Securities Co.
The moving average stood at 17,978.23 as of Tuesday.
Banks, automakers, electronics makers and other mainstay issues met with heavy selling.
An official at an online securities firm said that foreign investors who suffered losses due to Tuesday’s drops in European and U.S. shares sold Japanese stocks to cover the losses.
Disappointing earnings reports from major U.S. firms also adversely affected the Tokyo market, Tabei said, noting, “Investors grew cautious about business results to be announced by Japanese companies [later this month].”
The Nikkei average could suffer some more drops, after going up smoothly earlier this month, he added.
Falling issues far outnumbered rising ones 1,678 to 183 on the TSE’s first section, while 39 issues were unchanged.
Volume grew to 2.43 trillion shares from Tuesday’s 2.11 trillion shares.
Automakers Toyota, Mazda, Fuji Heavy and Honda met with selling, along with megabanks Mitsubishi UFJ, Mizuho and Sumitomo Mitsui.
Tokyo Electron and other semiconductor-related issues retreated after U.S. chip giant Intel reported Tuesday a year-on-year drop of 6.3 percent in its net profit for July-September.
China-related issues lost ground, among them industrial robot manufacturer Fanuc, electronics parts producer Murata Manufacturing, electronics maker Hitachi and Nippon Steel & Sumitomo Metal.
Other major losers included mobile phone carriers SoftBank and KDDI, and oil company Inpex.
By contrast, clothing store chain operator Fast Retailing rose for the first time in five market days.
Toho surged after the movie distributor on Tuesday announced an upward revision to its earnings estimates for the current business year to February.
In index futures trading on the Osaka Exchange, the key December contract on the Nikkei average was down 270 points at 17,940.Speech
