Nikkei falls nearly 2% on fears of Evergrande
Japan’s Nikkei fell nearly 2 percent on Thursday, weighed by fresh concerns about China’s Evergrande Group, worries ahead of a general election and concerns about the impact of rising costs on the future of companies.
The Nikkei fell 1.87 percent to close at 28,708.58 points, while the broader Topix index lost 1.13 percent to 2000.81 points.
Last night, the US Standard & Poor’s and Dow indices rose, but the Nasdaq fell as technology stocks took a breath.
The Nasdaq’s closing down triggered a sell-off in Japanese technology heavyweights as investors anxiously await whether Prime Minister Fumio Kishida will take decisive action to shore up the pandemic-ridden economy.
“The ruling LDP is likely to win the majority, but it is not clear whether it will make changes that meet market expectations,” said Eko Mitsui, a fund manager at Aizawa Securities. Mitsui was referring to the October 31 lower house elections.
“Investors are also concerned about the potential impact of higher costs and oil prices, as well as supply chain disruptions, on companies’ outlook,” he added.
Shares of China’s Evergrande, which are listed in Hong Kong and wracked by a debt crisis, lost 12 percent on Thursday when the company resumed trading after a hiatus of more than two weeks.
The share of Tokyo Electron chip-making equipment the most, which pushed the Nikkei index down, as the stock fell 4.61 percent. Shares of Fast Retailing, operator of Uniqlo clothing, lost 2.98 percent, and SoftBank Group fell 2.06 percent.
Airlines shares fell 2.1 percent, and recorded the largest decline among the 33 sub-sector indices on the stock exchange, amid fears of a return to the spread of Covid-19 injuries due to an increase in Britain.