TOKYO: Tokyo stocks plummeted on Tuesday, battered by hefty selling, especially of technology issues, following a fall on Wall Street.
The Nikkei average of 225 selected issues listed on the first section of the Tokyo Stock Exchange sank 909.75 points, or 3.08 percent, to finish at 28,608.59.
The index snapped a three-session winning streak and closed below the psychologically important threshold of 29,000 for the first time since April 30. It rose 160.52 points Monday.
The TOPIX index of all TSE first-section issues ended 46.35 points, or 2.37 percent, lower at 1,905.92, following a 19.22-point rise the previous day. The drop ended the broader index’s three-session advance.
The weakness of Tokyo stocks came after all three major U.S. stock market gauges dropped on Monday as inflation worries fueled by surging commodity prices drove investors away from tech and other growth stocks.
Appetite for tech stocks was also dampened by the SOX Philadelphia semiconductor index’s fall, brokers said.
Selling pressure became stronger in the afternoon on drops in U.S. stock index futures in off-hours trading and in Asian stocks, causing the Nikkei to shed nearly 1,000 points at one point.
“Selling pressure built up further in the afternoon following a fall in Nasdaq futures as investors became increasingly cautious about a further drop in U.S. stocks,” said Yutaka Miura, senior technical analyst at Mizuho Securities Co.
“The market’s plunge reflected active selling by short-term players,” Hirohumi Yamamoto, strategist at Toyo Securities Co., said, while noting that institutional investors are refraining from large-lot buying ahead of earnings announcements by more companies later this week.
The plunge is also attributable to selling for technical reasons, Masayuki Otani, chief market analyst at Securities Japan Inc., said. “Economic fundamentals have not changed,” Otani added.
On the TSE first section, decliners outnumbered gainers 1,989 to 169 while 33 issues were unchanged. Volume grew to 1,289 million shares from Monday’s 1,126 million shares.
Among tech stocks, semiconductor-related TDK and Advantest tumbled 5.60 percent and 5.49 percent, respectively.
Tech investor SoftBank Group plummeted 6.50 percent.
Kawasaki Heavy fell even though its operating profit estimate for the year through March 2022, released on Tuesday, beat market expectations.
Among other losers were Sony and Panasonic.
On the other hand, seasoning producer Ajinomoto grew 3.77 percent, aided by its upbeat earnings results for the year ended in March released on Monday.
Nissin Foods rose 3.16 percent after the company announced Tuesday a plan to acquire its own shares worth 12 billion yen.
In index futures trading on the Osaka Exchange, the key June contract on the Nikkei average retreated 880 points to end at 28,690.