Nikkei dips below key 38,000 mark - GulfToday

Nikkei dips below key 38,000 mark


Photo used for illustrative purpose.

Japan’s Nikkei share average dropped below the psychologically key 38,000 level for the first time this month on Monday, as a risk-off mood prevailed amid concerns about economic growth both at home and abroad.

Toyota Motor slid 2.6 per cent amid continued fallout from a certification scandal, with car-related shares among the worst performing sectors.

The Nikkei ended the day down 1.8 per cent at 38,102.44, after earlier falling as much as 2.2 per cent to 37,956.49 for the first time since May 30.

Of the index’s 225 components, 199 fell, while 25 rose and one was flat. The broader Topix skidded 1.7 per cent.

Almost all of the Tokyo Stock Exchange’s 33 industry groups declined, led by a 3.5 per cent slump for real estate. Only pharma managed a slight gain.

“Basically, the Nikkei has been tracking pretty much sideways for a long time, and now it’s being shaken a little by some worries about the economy,” in Japan, the United States and Europe, said Kazuo Kamitani, an equities strategist at Nomura Securities, projecting a correction could run as far as 37,500.

The Nikkei has mostly fluctuated some 500 points either side of 38,500 since late April, after hitting a record peak at 41,087.75 on March 22 and then dropping back as far as 36,733.06 a month later.

Automakers and suppliers shed 2.6 per cent on Monday.

National broadcaster NHK reported that Toyota would extend a production halt for affected models by at least an extra month to the end of July. Toyota Chairman and family scion Akio Toyoda faces a vote against his re-election at an annual shareholder meeting on Tuesday. Suzuki Motor dropped 3.6 per cent and Mazda lost 3.7 per cent.

Chip-related shares also retreated, with Tokyo Electron off 2.5 per cent and Advantest tumbling 3.7 per cent.


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