Tokyo stocks fall on concerns over oil prices hike, weak chip-related shares

Source: Xinhua| 2021-10-21 17:05:10|Editor: huaxia

TOKYO, Oct. 21 (Xinhua) -- Tokyo stocks finished sharply lower on Thursday as chip-related stocks tracked losses on the U.S. counterparts, and rising crude oil prices continued increasing concerns over the negative impact on corporate profits.

The 225-issue Nikkei Stock Average closed 546.97 points, or 1.87 percent, lower from Wednesday at 28,708.58.

The broader Topix index of all First Section issues on the Tokyo Stock Exchange ended 26.86 points, or 1.32 percent, lower at 2,000.81.

Trading volume on the main section decreased to 1,041.91 million shares from Wednesday's 1,117.80 million shares.

Dragging down by selling on large-cap chip-related stocks due to overnight losses on the U.S. Nasdaq index, Tokyo stocks opened low in the morning and extended losses in the afternoon following a drop in U.S. stock futures.

The U.S. dollar against the Japanese fell slightly toward the 114 yen line since the yen attracted buying as a safe asset even as Tokyo stocks dropped, dealers said.

Shingo Ide, the chief equity strategist at NLI Research Institute, said, "Surging crude oil prices have raised fears that it may squeeze corporate profits, while a slight strengthening of the yen (against the U.S. dollar) also dampened sentiment."

Some market participants remained on the sidelines before a slew of earnings results from major Japanese companies next week.

However, brokers said that concerns over the impact of the COVID-19 pandemic on economic activities have been eased with the ongoing vaccination program in Japan. Officials said on Wednesday that Tokyo and its surrounding prefectures of Saitama, Chiba and Kanagawa would lift COVID-19 restrictions on dining establishments from next week as the number of new COVID-19 infections had declined steadily.

By the close of play, every sector lost ground with air transportation, and electric appliance shares heading the downtrend. Declining issues outnumbered advancing ones 1,786 to 323 on the First Section, while 75 finished unchanged.

Among chip-related firms, Tokyo Electron fell 4.6 percent, and Screen Holdings dropped 2.9 percent.

After crude oil futures surpassed 84 U.S. dollars per barrel to a new seven-year high in the New York market, automobile manufacturers and air transportation stocks faced selling, with Toyota Motor and Suzuki Motor both declining 2.4 percent, while ANA Holdings and Japan Airlines sliding 2.3 percent and 1.8 percent, respectively. Enditem