BUSINESS Tokyo stocks closed lower amid concerns over COVID-19 resurgence in Japan

BUSINESS

Tokyo stocks closed lower amid concerns over COVID-19 resurgence in Japan

Xinhua

19:09, April 08, 2021

TOKYO, April 8 (Xinhua) - Tokyo stocks closed lower Thursday as rising fears over a resurgence of domestic COVID-19 cases saw bargain-hunting subdued amid concerns over upcoming corporate earnings and the outlook for the broader economic recovery.

The 225-issue Nikkei Stock Average lost 21.81 points, or 0.07 percent, from Wednesday to close the day at 29,708.98.

The broader Topix index of all First Section issues on the Tokyo Stock Exchange, meanwhile, fell 15.57 points, or 0.79 percent, to finish at 1,951.86.

Local brokers said that rising domestic COVID-19 cases impacted the market mood with concerns that further restrictions could impact the pace of the economic recovery, particularly if the services sector continues to be stifled.

"Investors have priced in the infection situation to some extent in Tokyo and Osaka, but concerns are now growing that the spread of the virus would expand to other Japanese regions," Yutaka Miura, senior technical analyst at Mizuho Securities Co., was quoted as saying.

Yuriko Koike, the governor of Tokyo, said Thursday that the metropolitan government would take stronger measures to counter the resurgence of COVID-19 cases in the capital, with the measures likely to last through the Golden Week holidays from late April through early May, the peak period for domestic travel.

Other prefectures that could be subjected to tougher restrictions, to be finalized by the government on Friday, are Saitama and Kyoto prefectures.

Osaka Prefecture, meanwhile, declared a medical state of emergency on Wednesday as the region's healthcare system has faced a severe strain as new daily COVID-19 cases have surpassed Tokyo's in recent days.

"Shares are prone to be sold also because investors are watching whether companies start to have more cautious views about their earnings for the fiscal year from April, given that there were hopes for a strong recovery," Miura also said.

Other analysts said that more restrictions placed on businesses or people's movements as a result of the nation's rising COVID-19 cases could delay the recovery in services consumption.

"Japanese equities may slow down relative to other markets," Masayuki Kichikawa, chief macro strategist at Sumitomo Mitsui Asset Management Co. said.

"Markets are placing a lot of emphasis on the size of fiscal stimulus and the vaccination rate. More restrictions would be a negative factor because that would delay a recovery in services consumption" said Kichikawa.

By the close of play, decliners were led by air transportation, textile and apparel, and bank issues.

Transportation-linked issues lost ground on concerns rising COVID-19 cases could result in less patronage over the upcoming Golden Week national holidays.

As a result, Japan Airlines dropped 3.3 percent and West Japan Railway fell 2.8 percent.

Toshiba Corp. lost 0.4 recent, after announcing the previous day a 20 billion U.S. dollar offer from CVC Capital Partners to take it private.

High-tech issues found favor as investors still hunted for bargains, with Tokyo Electron adding 1.2 percent, while Taiyo Yuden edged up 0.2 percent by the close.

Mitsubishi UFJ Financial Group Inc. was a notable underperformer, losing 2.5 percent, long with Takeda Pharmaceutical Co. Ltd. slumping 3.1 percent by the close.

Issues that fell outpaced those that rose by 1,883 to 285 on the First Section, while 22 ended the day unchanged.

On the main section on Thursday, 1,134.46 million shares changed hands, rising from Wednesday's volume of 1,083.80 million shares.

The turnover on the penultimate trading day of the week came to 2,544.50 billion yen (23.22 billion U.S. dollars).

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