Japan shares drop to 1-1/2-week low on GDP contraction, coronavirus worries

  • Reuters
  • Stock Market News
Japan shares drop to 1-1/2-week low on GDP contraction, coronavirus worries
Credit: © Reuters.

TOKYO, Feb 17 (Reuters) - Japanese stocks slid to a 1-1/2-week low on Monday, hurt by a worse-than-expected economic contraction in the December quarter, while worries about the business impact of the coronavirus epidemic continued to weigh on the market.

The Nikkei average .N225 declined 0.7% to 23,523.24 points, its lowest closing since Feb. 5, while the broader Topix .TOPX ended down 0.9% at 1,687.77, also a 1-1/2-week low.

All but two of the 33 sector sub-indexes on the Tokyo Stock Exchange were trading lower, with air transport .IAIRL.T , foods .IFOOD.T and metal products .IMETL.T being the worst three performers.

Japan's economy contracted at an annualised pace of 6.3% in the October-December period, data showed on Monday, shrinking at the fastest pace in almost six years and raising the risk it could again slide into recession. Economists' median estimate was for a 3.7% contraction. all knew that the figures were going to be weak, but the actual numbers were still shocking," traders said.

Denting sentiment further were fears about a global economic fallout from the virus, with the number of new cases in mainland China rising by 2,048 to 70,548, and the death toll hitting 1,770. China, more than 500 infections have been confirmed, mostly in people who travelled from Chinese cities, with five deaths - in Japan, the Philippines, Hong Kong, Taiwan and France.

Concerns about the epidemic have made people careful about attending outdoor activities and events in Japan, with Tokyo marathon organisers reportedly cancelling entries from the general public due to the coronavirus outbreak. amusement park operators Oriental Land Co Ltd 4661.T and Sanrio Co Ltd 8136.T lost 4.3% and 3.1%, respectively.

Japan's top face mask maker Unicharm Corp 8113.T bucked the overall weakness and climbed 4.1%.

Elsewhere, Kirin Holdings Co Ltd 2503.T tumbled 7.7% after the brewer posted a net profit of 59.6 billion yen ($543 million) for the year-ended December, down 63.7% from a year earlier. The firm also opposed a UK-based activist's proposal to buy treasury shares worth 600 billion yen. Motor Co Ltd 7201.T slid 2.1% to its lowest in nearly 11 years, after losing 9.6% on Friday, as its French partner Renault RENA.PA posted its first annual loss in a decade. = 109.8200 yen)

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