Japan’s Nikkei hits 20-mth low after Wall Street slide deepens

Marcus Newton
December 28, 2018

The benchmark Nikkei average powered higher to close above 20,000 on the Tokyo Stock Exchange on Thursday, thanks to a strong overnight rally in US equities.

The broader Topix index dipped 4.99 percent or 74.27 points to 1,413.92 by the break.

All sectors fell, with precision instrument, pharmaceutical, and machinery issues leading the decliners.

On the heels of the United States markets crash, Nikkei 225, which has been slowly sliding downward over the past weeks, dropped sharply to 19,144 on open Tuesday, down 20percent from its October 2 peak. The bearish sentiment also reflected intensifying concerns about the USA political situation following the news of a possible prolonged US government shutdown, the potential dismissal of Federal Reserve Chairman Jerome Powell and the resignation of Defense Secretary James Mattis, brokers said.

"There's a lot of uncertainty, and that's one of the biggest things that the market doesn't like", Andrew Sullivan, a Hong Kong-based market economist, told CNN.

Global investors already had a laundry list of worries, including China's slowing economy, the Trump administration's trade war with China and the unpredictability surrounding Brexit. But I think it will straighten. Some said the move may have backfired by hurting investor sentiment.

"They're raising interest rates too fast because they think the economy is so good", Trump said.

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The Nikkei index has already fallen 14 percent this month.

Wall Street stocks extended their steep sell-off on Monday, with the S&P 500 dropping almost 15 percent so far this month, as investors were rattled by the U.S. Treasury secretary's convening of a crisis group and by other political developments.

The yen's weakening against the dollar also served as a tailwind to Japanese shares, market sources said.

A stronger yen was adding to the woes for markets in Japan, he added.

"After all, it was the USA market that was carrying the weight of global risk sentiment on its shoulder".

On the First Section, declining issues outnumbered advancers 2,096 to 27, while eight ended the day unchanged.

Among exporters, Nissan Motor gained 12.70 yen, or 1.5 percent, to 850.80 yen, Sony rose 77 yen, or 1.5 percent, to 5,077 yen, Panasonic climbed 15.30 yen, or 1.6 percent, to 935.30 yen and Sharp advanced 18 yen, or 1.8 percent, to 1,022 yen.

Other reports by MaliBehiribAe

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