The benchmark Nikkei average closed below 19,000 on the Tokyo Stock Exchange Monday, pressured by profit-taking after last week’s surge.
The 225-issue average lost 245.84 points, or 1.28 percent, to end at 18,890.48. On Friday, the key market gauge shot up 561.88 points.
The Topix index of all first-section issues fell 12.75 points, or 0.82 percent, to close at 1,537.05, after rising 49.39 points the previous trading day.
The Tokyo market got off to a sluggish start, weighed by stepped up profit-taking activities and selling on a rally after the Nikkei average spiraled up by some 1,300 points in the past three sessions, brokers said.
In the afternoon, the key market gauge expanded its loss to 380 points, amid investor sentiment being hurt by poor performance of equities in other Asian markets such as Shanghai.
The Nikkei’s tumble was caused chiefly by plunges of its heavyweight components, including clothing retailer Fast Retailing and mobile phone carrier SoftBank Group, brokers observed.
Tokyo stocks accelerated their downswing in the early afternoon, as investors grew concerned about a possible sell-off on Wall Street later on Monday, in view of a drop in U.S. stock index futures on the GLOBEX 24-hour trading system, players said.
But the market resisted falling further for the rest of the day, supported by buying on dips.
“Mainstay issues were prime targets for selling, but purely domestic demand-oriented names drew buying,” said Hiroichi Nishi, assistant general manager for investment research and investor services at SMBC Nikko Securities Inc. “Investors were reluctant to tilt positions in the month-end session,” he added.
The market turned less volatile in the afternoon, also because investor attention shifted to key economic indicators to be released abroad this week, such as Tuesday’s Chinese manufacturing purchasing managers’ index for August and Friday’s U.S. government jobs report for the same month, brokers said.
The upcoming Chinese manufacturing data is particularly closely watched, a major brokerage firm official said. If the PMI reading is disappointing, China-related stocks will be hit by renewed selling, the official warned.
Despite the key indexes’ drops, winners outnumbered losers 918 to 897 in the TSE’s first section, while 79 issues were unchanged.
Volume decreased to 2.47 billion shares from Friday’s 2.96 billion shares.
Issues backed by Chinese demand were downbeat. Among them were robot producer Fanuc, air conditioner-maker Daikin Industries, daily goods supplier Kao and construction machinery manufacturer Komatsu.
Automakers Toyota, Honda and Fuji Heavy Industries were dampened by the yen’s strengthening.
On the other hand, domestic demand-oriented “defensive” issues were buoyant. They included drugmaker Eisai, Japan Tobacco, Daio Paper and beverage-maker Ito En.
Also on the sunny side were game-maker Nintendo, as well as electronics giants Toshiba and Panasonic.
In index futures trading on the Osaka Exchange, the key September contract on the Nikkei average slumped 340 points to end at 18,840.
