Japan’s Nikkei share average fell nearly 2% on Thursday, weighed down by fresh fears around China Evergrande Group, concerns ahead of a general election and worries over the impact of rising costs on corporate outlook.

The Nikkei fell 1.87% to close at 28,708.58, while the broader Topix lost 1.31% to 2,000.81.

Overnight, the S&P 500 and the Dow rose, with the Dow hitting an intraday record high, while the Nasdaq lagged as technology stocks took a breather.

The Nasdaq’s weak finish triggered a sell-off in Japanese technology heavyweights, while investors nervously awaited whether Prime Minister Fumio Kishida would take decisive measures to boost the pandemic-beaten economy.

“The ruling LDP (Liberal Democratic Party) would probably win a majority but it is not clear whether the party would make changes that would meet market expectations,” said Ikuo Mitsui, a fund manager at Aizawa Securities.

The LDP will likely lose some seats in the Oct. 31 lower house election, but the ruling coalition it forms with the Komeito party is expected to maintain a majority, local media reported.

“Also, investors are wary about the potential impact of rising costs and oil prices as well as supply chain disruptions on corporate outlook for the second half of the corporate business year,” Mitsui said.

The Hong Kong-listed shares of debt-ridden China Evergrande lost 12% on Thursday when the company resumed trading after a more than two-week suspension.

Chip-making equipment maker Tokyo Electron dragged the Nikkei the most, falling 4.61%. Uniqlo brand clothing shop operator Fast Retailing lost 2.98% and global technology start-up investor SoftBank Group fell 2.06%.

Airlines were down 2.1%, declining the most among the exchange’s 33 industry sub-indexes amid concerns about a possible resurgence of COVID-19 infections as cases in the UK rose.

Oil-related shares shined as crude prices rose.

Nippon Paint Holdings gained 0.59% after the world’s fourth-largest paint company announced an acquisition of decorative paints specialist Cromology.

Reuters