Tokyo stocks close sharply lower as global COVID-19 cases top 10 mln

Jun 29, 2020

National
Tokyo stocks close sharply lower as global COVID-19 cases top 10 mln

Tokyo (Japan), June 29: Tokyo stocks closed sharply lower Monday as investor sentiment was dented by concerns over the recovery of the global economy as worldwide COVID-19 cases surpassed 10 million, with surging cases in the United States in particular triggering a rout here.
The 225-issue Nikkei Stock Average dropped 517.04 points, or 2.30 percent, from Friday to close the day at 21,995.04.
The broader Topix index of all First Section issues on the Tokyo Stock Exchange, meanwhile, lost 28.15 points, or 1.78 percent, lower at 1,549.22.
Trading inherited a downbeat mood from U.S. exchanges late last week following a resurgence in COVID-19 cases in multiple states across the United States, local brokers highlighted.
With some U.S. states imposing domestic quarantine measures for those traveling within the country and some businesses being forced to shutter operations again, investors' risk off mood triggered a rout.
"The fear of a virus resurgence firmly capped shares' upsides and any negative news regarding the pandemic could trigger further sell-offs," Shingo Ide, chief equity strategist at the NLI Research Institute, was quoted as saying.
COVID-19 cases in the United States continued to spike over the weekend, investment strategists here said, forcing investors to switch out of riskier assets like stocks and into safe-havens like the Japanese currency.
The dollar was, thus, comparatively firm against the yen, quoted at 107.19-20 yen at 5 p.m. local time in Tokyo, which sent local exporters lower as they are typically reliant on a weaker yen to boost profits made overseas when repatriated, brokers here said.
Japanese banking issues that had gained last week from the easing of bank regulations in the United States which could free up billions of dollars in the industry lost ground, with Mitsubishi UFJ Financial Group losing 2.3 percent, while Sumitomo Mitsui Financial Group dropped 2 percent.
Heavily weighted component SoftBank Group lost 2.8 percent, after announcing forecasts of gains to the tune of 600 billion yen (5.6 billion U.S. dollars) in the April-June quarter, owing to a hefty share selloff of its stock in T-Mobile U.S. Inc., as part of the conglomerate's plans to raise funds and buyback shares in a bid to reduce debt.
Issues sensitive to domestic demand retreated on concerns over a spike in COVID-19 cases nationwide and in Tokyo particularly, and department store-linked issues were offloaded amid concerns of another round of business shutdowns here.
As such, Isetan Mitsukoshi Holdings tumbled 4.7 percent, while J. Front Retailing plunged 6.0 percent. Marui Group, meanwhile, ended the day 3.1 percent lower.
Toyota Motor was among notable decliners, skidding down 1.6 percent, after the automaker said its global production tumbled more than 50 percent in May on year due to the pandemic.
Every industry category retreated into negative territory, with iron and steel, mining, and air transportation issues comprising those that declined the most by the close of play.
Issues that fell outpaced those that rose by 1,618 to 506 on the First Section, while 40 ended the day unchanged.
On the main section on Monday, 1.249 billion shares changed hands, rising from Friday's volume of 1.137 billion shares.
The turnover on the first trading day of the week came to 2.140 trillion yen (19.969 billion U.S. dollars).
Source: Xinhua News Agency