Japanese shares fall on worries domestic lockdowns are looming

  • Reuters
  • Stock Market News
Japanese shares fall on worries domestic lockdowns are looming
Credit: © Reuters.

TOKYO, March 26 (Reuters) - Japanese shares took a tumble on Thursday following three days of massive gains after a rise in domestic coronavirus cases stoked worries of tougher domestic restrictions for social distancing.

The Nikkei share average .N225 dropped 3.8% to 18,803.29. It had risen 18% in the last three sessions, including an 8% gain the previous day - its biggest since 2008.

The rally was driven by a range of factors, including buying from domestic public accounts and hopes of big U.S. stimulus, which all prompted sellers to unwind their positions.

But the sentiment soured after Tokyo's governor late on Wednesday asked residents to avoid non-essential outings through until April 12, warning of the risk of an explosive rise in infections in Japan's capital. Japanese government was preparing to set up a special headquarters on coronavirus as early as Thursday afternoon, a step that could set the stage for declaring a state of emergency over the outbreak, Kyodo news agency reported, after Tokyo saw a sharp rise in cases this week. rise in infections in Tokyo is making lockdowns in Japan realistic, forcing markets to re-assess the impact of the virus," said Hideyuki Suzuki, head of investment research at SBI (NS: SBI ) Securities.

"Upcoming economic data will likely show an unprecedented level of devastation but it is not clear if that has been priced in at the recent bottom of the market."

In a sign of things to come, trading house Marubeni 8002.T lost 12.9% after it predicted a record net loss of 190 billion yen ($1.7 billion) for the year ending March, as the epidemic drives an unprecedented oil price slide and falls in other commodities. warning hit its rival companies, such as Mitsubishi Corp 8058.T , Mitsui Co 8031.T and Itochu 8001.T , which fall 3.1%, 4.6% and 4.1%, respectively.

SoftBank Group 9984.T slumped 7.9% after Moody's downgraded it by two notches to "Ba3", prompting the tech conglomerate to request a withdrawal of the rating. broader Topix .TOPX fell 2.2% to 1,392.77.

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