Tokyo stocks declined significantly Tuesday, weighed by active profit taking amid mounting concerns about economic conditions overseas.
The 225-issue Nikkei index on the Tokyo Stock Exchange fell 276.11 points, or 0.96%, to close at 28,546.18. On Monday, the benchmark advanced 190.84 points.
The Topix index of all first division releases closed 14.00 points, or 0.75%, down at 1,848.00 after gaining 5.36 points the previous day.
Profit-taking gained momentum right after the opening bell, following the decline in the US Dow Jones Industrial Average on Monday and the slow performance of the Dow Jones futures contract in off-hours trading.
Concerns about the US economy increased as Democratic leaders suggested that President Joe Biden’s $ 1.9 trillion stimulus package to combat the Coronavirus crisis not be passed without downsizing or as soon as expected.
The dismal European economic data also prompted investors to lock in profits for the time being.
Influenced by the fall of other Asian stocks, Tokyo stocks sank deeper into negative terrain in the afternoon, forcing the Nikkei to drop around 300 points at some point.
On top of the profit taking, Maki Sawada, a strategic analyst at Nomura Securities, said, “The selling of squared positions has gained momentum before the start of the US Federal Reserve’s two-day FOMC meeting until Wednesday.”
She added: “The market also fell due to increasing doubts about the status of vaccination against Corona virus in the United States after the American pharmaceutical company Merck announced that it would stop developing two vaccines.”
In the first section of the Tokyo Stock Exchange, the number of losing shares exceeded the number of winners 1,276 compared to 830, while 84 issues remained unchanged. Volume increased slightly to 1070 billion shares from 1016 billion shares on Monday.
Clothing chain Fast Retailing, medical information provider M3 and air-conditioner manufacturer Daikin were among the main victims of profit.
Playmaker Bandai Namco and Robot Maker Yaskawa Electric fell 4.64% and 3.43%, respectively.
On the other hand, the pharmaceutical company, Confirmation, which is conducting a clinical trial of a vaccine for the Coronavirus developed by Moderna, rose by 1.83%, after the American pharmaceutical company said that the vaccine had proven effective against the variants of the Corona virus found in Britain and South Africa.
In index futures trading on the Osaka Stock Exchange, the main contract for the month of March on the Nikkei index lost 250 points, ending at 28,530.
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