Nikkei dips as oil woes add to pandemic fears ahead of earnings

  • Reuters
  • Stock Market News
Nikkei dips as oil woes add to pandemic fears ahead of earnings
Credit: © Reuters.

By Hideyuki Sano

TOKYO, April 21 (Reuters) - Japanese shares dropped on Tuesday with energy-related companies taking the brunt of a collapse in oil prices while the virus pandemic sapped risk appetite ahead of corporate earnings.

The Nikkei share average .N225 fell 1.58% to 19,358.77, slipping further from Friday's near six-week high of 19,922. The broader Topix .TOPX lost 0.89% to 1,419.66.

On the whole, trade was slow with investors looking to the Japanese earnings season starting later this week.

Companies with exposure to the oil market were in focus after oil prices grabbed headlines with the front-month May U.S crude futures contract CLc1 turning negative overnight. plant engineering firm JGC 1963.T dropped 4.1% while Chiyoda Corp 6366.T fell 3.1%.

Trading houses, for which resource operations are a core part of business, were another victim.

Mitsubishi Corp 8058.T lost 2.0% while Mitsui Co 8031.T shed 2.2%. Itochu Corp 8001.T fell 1.6%.

Cyclical shares such as semi-conductor related companies were also under pressure as investors continued to fret over the impact from the novel coronavirus pandemic.

Silicon wafer manufacturer Sumco Corp 3436.T fell 3.9% while electronic parts maker TDK Corp 6762.T shed 3.3%.

Lower oil prices offered limited comfort for companies that would normally benefit from them, such as airlines, given the sheer scale of demand destruction.

Japan Airlines 9201.T fell 1.3% but rival ANA Holdings 9202.T managed to eke out gains of 0.3% after cutting its profit estimates for the year that ended on March 31 to 27 billion yen ($250.9 million) from the previous estimate of 94 billion yen. Its earnings announcement is scheduled on April 28. Bio 4974.T rose 11.8% after a media report that it would build a mass production system for the coronavirus vaccine it is developing.

Nintendo 7974.T also gained 0.6% following a media report the game company was considering increasing the production of its popular "Switch" game console, demand for which has risen after lockdowns in many countries.

Defensive shares were still in favour with food company Meiji Holdings 2269.T rising 1.8% and toiletry goods maker Kao Corp 4452.T gaining 1.1%.

($1 = 107.6000 yen) (Editing by Jacqueline Wong)

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