Japanese shares slipped on Tuesday, with the Nikkei hitting a three-week closing low, as the new coronavirus spread in China and beyond, prompting authorities to take more drastic measures to contain its outbreak.
The Nikkei share average shed 0.55 per cent to 23,215.71, the lowest close since Jan. 8. The Topix, which includes all listed shares on the Tokyo Stock Exchange’s main board, slipped 0.6 per cent to a two-month closing low of 1,692.28.
Selling widened after being initially concentrated in sectors that are likely to be directly hit by the virus, such as tourism and related industries.
Even companies seen having strong growth prospects such as Keyence and Recruit Holdings were not spared, falling 2.8 per cent and 1.9 per cent , respectively.
All but two of the 33 Topix industry subindexes closed in the red.
“Share prices had been elevated, so a correction was necessary and the coronavirus provided that trigger,” said Tetsuro Ii, president of Commons Asset Management.
“But as was the case with SARS and avian flu, it will take some time before this will be settled. As long as the number of patients is increasing, it will be hard for investors to buy shares aggressively.”
The death toll from the coronavirus has passed 100 in China, and the rich, eastern province of Zhejiang has said companies there were not allowed to resume operations before Feb. 9.
Steelmakers and shippers, seen as China-dependent, were among the worst performers, falling 2.4 per cent and 1.3 per cent respectively.
On the other hand, tourism-related shares, which have been badly hit since the virus started to rattle markets, steadied with the Topix air transport subindex closing almost unchanged.
Tokyo Disney Resort operator Oriental Land eked out a gain of 0.1 per cent after heavy selling the previous day.
Mask maker Kawamoto Corp extended its rally, rising 23.7 per cent in volatile trade. The company’s market value has more than quadrupled so far this month.
But others saw their fortune reversed. Protective attire maker Azearth fell 16.3 per cent after having risen more than 100 per cent in the six sessions until Monday.
Nitto Denko, a manufacturer of industrial tapes and films, fell 1.6 per cent as lower-than-expected quarterly earnings overshadowed a share buyback announcement.
Bengo4.com slumped 18.4 per cent , the biggest since its listing in December 2014, after the online legal support services provider posted its first ever quarterly loss.
Source: Economic Times
