Nikkei hits 3-week low as new virus strain damps recovery hopes

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Nikkei hits 3-week low as new virus strain damps recovery hopes


TOKYO: Japanese shares plumbed three-week lows on Tuesday, as investors took profits from stellar gains over the past couple of months on concerns that a fast-spreading new coronavirus strain found in Britain could disrupt a swift global economic recovery.

The Nikkei average fell 1.04per cent, the biggest drop in about a month, to 26,436.39, its lowest close since late November. It fell below its 25-day moving average for the first time since the start of the rally following U.S. elections in early November.

The broader Topix lost 1.56per cent to 1,761.12, with all the 33 sector sub-indexes on the Tokyo exchange ending lower.

The weakness could be attributed to worries over the new coronavirus strain but profit-taking ahead of year-end holidays is a bigger factor, said Yasuo Sakuma, chief investment officer at Libra Investments. “I have already done so myself,” he added.

Fujifilm Holdings tumbled 6.0per cent after the Japanese Health Ministry said its medical review board concluded that clinical trial data to determine the efficacy of the firm’s COVID-19 drug candidate Avigan was inconclusive.

Oriental Land dropped 2.6per cent after the Nikkei business daily reported that an official filing showed Mitsui Fudosan reduced its stake in the Tokyo Disney Resort operator.

The market was also weighed down by rising concerns over domestic virus infections as Tokyo Governor Yuriko Koike on Monday urged the capital’s 14 million residents to stay at home during the upcoming holiday season.

Railway and airline operators declined, with East Japan Railway down 2.1per cent and ANA Holdings falling 2.3per cent.

Oil-related shares took a hit as crude prices plunged following the news on the new virus strain. Inpex dropped 5.0per cent, while Eneos Holdings lost 2.7per cent.

The index of Mothers start-up shares dropped 4.0per cent, falling decisively below its 100-day moving average, a bearish signal, to a three-month low.





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