Tokyo stocks close sharply lower as Wall Street's overnight rout sparks selloff

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As investors switched out of riskier assets like stocks and into safe havens like the Japanese yen, the currency's appreciation against the U.S. dollar saw bluechip issues here with a wide exposure to overseas markets heavily pressured.

They said one factor was disappointing earnings reports and outlooks from major U.S. firms including chip maker giant Texas Instruments Inc.

The broader Topix index of all First Section issues on the Tokyo Stock Exchange, meanwhile, plunged 51.15 points, or 3.1 percent, to finish at 1,2000.92.

TOKYO, Oct. 25 (Xinhua) -- Tokyo stocks closed sharply lower Thursday, with the benchmark Nikkei index ending at a near seven-month low, as Wall Street's overnight rout dented investor sentiment and triggered a hefty selloff here.

Mirroring their counterparts on Wall Street, Japanese chip makers lost ground, with Advantest plummeting 9.8 percent to 1,891 yen and Screen Holdings falling 6.9 percent to 5,7200 yen.

Also contributing to the perfect storm for the equities rout in New York was U.S. data showing that house sales had slumped to their lowest level in almost two years, leading investors here and worldwide to become increasingly concerned about the outlook for the global economy.

On the First Section, declining issues pummeled advancing ones by 2,072 to 34 advanced, with 3 ending the day unchanged, and on the main section on Thursday, 1,641.200 million shares changed hands, rising from Wednesday's volume of 1,417.53 million shares.

Makoto Sengoku, market analyst at Tokai Tokyo Research Institute, meanwhile, described the rout as a "mess of bad factors."

As such, Sony Corp. fell 5.5 percent to 5,869 yen, Toyota reversed 2.7 percent to 6,402 yen, while Renesas Electronics Corp and TDK Corp. relinquished more than 6 percent.

"Investors see that U.S. manufacturers surrender to rising material costs, higher personnel costs and slower demand due to trade war, and they worry that these factors will also hit other global companies," Shogo Maekawa, global market strategist at JPMorgan Asset Management, was quoted as saying.

Okasan Online Securities said in a client note that a "sense of uncertainty for the global economic outlook stoked worries that the market rout in New York was going to affect Asia."

By the close of play, all industry categories on the main section retreated into negative territory, with services, glass and ceramic products, and miscellaneous product-linked issues comprising those that declined the most.

The 225-issue Nikkei Stock Average tumbled 822.45 points, or 3.72 percent, from Wednesday to close the day at 21,268.73.

The turnover on the penultimate trading day of the week came to 2,981.3 billion yen (26.55 billion U.S. dollars).

Seiki Orimi, senior investment strategist at Mitsubishi UFJ Morgan Stanley Securities Co., said "Investors grew cautious about the weaker outlook due to sluggish earnings reports from U.S. companies."

Local brokers said that a myriad of negative factors combined leading to a rout on Wall Street overnight, which saw the Dow Jones Industrial Average relinquish more than 2 percent and the Nasdaq Composite Index tumbling more than 4 percent.

Another factor, market strategists here said, was the result of the U.S.-initiated trade dispute leading to rising material and personnel costs which are weighing on U.S. corporate earnings.