Japanese shares end lower on profit booking; spike in Covid-19 cases hits sentiment

Japanese shares end lower on profit booking; spike in Covid-19 cases hits sentiment

TOKYO: Japanese shares closed lower on Tuesday as investors booked profits from recent rallies, while worries about the economic impact from a possible fourth wave of the Covid-19 in the nation hurt sentiment.

Nikkei share average fell 1.3 per cent to close at 29,696.63, after hitting the 30,000 mark for the first time in more than two weeks on Monday. The broader Topix lost 1.47 per cent to close at 1,954.34.

“Investors sold stocks after a sharp gain in the past few days,” said Norihiro Fujito, chief investment strategist at Mitsubishi UFJ Morgan Stanley Securities.

“They are also concerned about the increasing number of Covid-19 cases in and outside Japan. The Japanese government’s measures may not have any effect on preventing the virus spread, which means the economy could continue to be damaged.”

Index heavyweights Fast Retailing, an operator of Uniqlo brand clothing stores, fell 1.5 per cent while SoftBank Group lost 1.12 per cent and Tokyo Electron lost 2.27 per cent.

Pandemic-beaten leisure stocks, which rebounded this year, fell, with ANA Holdings losing 2.31 per cent and Japan Airlines dropping 2.44 per cent. Tokyo Disney Resort operator Oriental Land fell 1.87 per cent.

Japanese health authorities said on Monday they were concerned that variants of the coronavirus are driving a nascent fourth wave in the pandemic with just 109 days remaining until the Tokyo Olympics.

The announcement of Credit Suisse Group of an estimated loss of 4.4 billion Swiss francs ($4.7 billion) from its relationship with Archegos Capital Management LP made investors wary about potential losses at other financial firms, said Mitsubishi UFJ’s Fujito.

The Topix sub-index for banks was the third worst performer among the 33 sub-indexes on the Tokyo Stock Exchange.

Mizuho Financial Group dropped 2.83 per cent, while Sumitomo Mitsui Financial Group fell 2.25 per cent and Mitsubishi UFJ Financial Group lost 2.06 per cent.

Tracking a 4 per cent decline in oil prices, oil and gas explorers Inpex lost 2.83 per cent and Japan Petroleum Exploration slipped 2.1 per cent.

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