Nikkei closes at lowest since March on global growth concerns

  • Reuters
  • Stock Market News
Nikkei closes at lowest since March on global growth concerns
Credit: © Reuters.

* Topix ends at lowest since May 2017

* Automakers fall after U.S. peers make demands for a trade deal

* Retail investors sell stocks for SoftBank listing - analysts

By Ayai Tomisawa

TOKYO, Dec 11 (Reuters) - Japan's Nikkei closed at nearly nine-month lows on Tuesday as worries about global growth pressured financial and cyclical stocks, while uncertainty over a U.S.-Japan trade deal hit automakers.

The Nikkei share average .N225 ended 0.3 percent lower at 21,148.02, the lowest close since late March.

The broader Topix .TOPX fell 0.9 percent to 1,575.31, the lowest closing level since May 2017.

Financial shares underperformed, dragged down by a sell-off in global peers such as Citigroup (NYSE: C ) C.N and Bank of America (NYSE: BAC ) BAC.N , after uncertainty over Britain's exit from the European Union kept investors on edge about global growth.

Mitsubishi UFJ Financial Group 8306.T tumbled 2.0 percent and Sumitomo Mitsui Financial Group 8411.T shed 1.6 percent.

"As investors are worried about the impact on slowing global growth and interest rates on banks, they are likely to avoid buying banking shares for a while," said Takuya Takahashi, a strategist at Daiwa Securities.

Life insurers, which invest in higher-yielding products such as foreign bonds, lost ground as well. Dai-ichi Life Holdings 8750.T slid 1.5 percent and T&D Holdings 8795.T stumbled 2.8 percent.

Cyclical stocks such as technology and electronic components makers were sold. Sharp Corp 6753.T tumbled 4.4 percent to a level not seen since September 2016, Murata Manufacturing 6981.T dropped 1.3 percent and TDK Corp 6762.T declined 2.3 percent.

Automakers were sold after Detroit peers and labour unions on Monday insisted that any U.S. trade deal with Japan contain strong provisions to combat currency manipulation and pry open Japan's largely closed auto market before any lowering of U.S. autos tariffs. Motor 7201.T slumped 3.1 percent and Subaru Corp 7270.T tanked 2.4 percent.

Analysts said retail investors were seen selling some of their overall holdings to prepare for the Dec. 19 listing of SoftBank Group's 9984.T telco unit SoftBank Corp 9434.T . said that demand was greater than the number of shares on offer.

"Retail investors are seen taking profits on some of their holdings to buy SoftBank shares today as it takes several days to convert stocks to cash," said Norihiro Fujito, a chief investment strategist at Mitsubishi UFJ Morgan Stanley (NYSE: MS ) Securities.

"Their selling is also thought to be one of the reasons for the market's weakness."

Defensive stocks outperformed. Chubu Electric Power Co 9502.T and Tokyo Gas 9531.T both rose 0.8 percent and realtor Mitsui Fudosan 8801.T gained 1.5 percent. (Editing by Jacqueline Wong)

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