Tokyo, Nov. 19 (Jiji Press)–Stocks plunged on the Tokyo Stock Exchange Wednesday, as export-oriented technology heavyweights were beaten down on the heels of Wall Street stocks’ setback overnightand the yen’s appreciation versus the dollar.
Amid dwindling turnover, the key Nikkei average hovered sharply lower as individual investors, who snapped up stocks such as Internet business investor Softbank on margin in the Nikkei’s spectacular 48 pct rally between late April and late October, continued to dump them in order to avoid margin calls in the sliding market, brokers said.
The 225-issue Nikkei average finished down 282.45 points, or 2.9 pct, at a session low of 9,614.60. On Tuesday, the key market gauge rose 110.22 points.
The TOPIX index of all first-section issues was down 20.25 points, or 2.1 pct, at 953.19, also a session low. It ended up 1.55 points in the previous session.(MORE)Tokyo Stocks Plunge as Higher Yen Hits Techs
Losers outnumbered gainers 870 to 578 on the first section, while 79 issues ended flat.
Volume shrank to 1,036 million shares from Wednesday’s 1,249 million shares as a wait-and-see mood grew in the market.
“Players were concerned about the course of New York stocks amid uncertainties over external factors surrounding the Tokyo market,” said Masatoshi Sato, senior strategist at Mizuho Investors Securities Co., referring to an outflow of funds from U.S. equities.
The dollar tumbled to an all-time low against the euro partly due to a U.S. government report showing a steep drop in foreign investors’ net purchases of U.S. stocks and bonds in September. Reflecting worries about the dollar’s further fall, commodities like gold and oil surged.
Analysts said lingering concerns over further selling pressure from massive long margin positions, which posted the biggest weekly decline for this year last week but still stood above 2 trillion yen, weighed heavily on the market.
“The market tumble is due to fears of margin calls. Investors have no choice but to sell right now,” said Kenichi Hirano, equity general manager at Tachibana Securities Co.
Still, market watchers showed expectations for the market’s pickup once the supply-demand balance starts to improve after having been hit hard by foreign investors’ selling toward book closings at many hedge funds in late November.
Sacrifice selling is seen to run its course after the Nikkei falls to around 9,200, Mizuho Investors’ Sato said.(MORE)Tokyo Stocks Plunge as Higher Yen Hits Techs
Selling hit a broad range of tech issues including Tokyo Electron, Advantest, TDK, Canon, Toshiba and NEC, as well as automakers Toyota, Honda and Nissan.
Also sluggish were telecommunications carriers. Third-ranked Japan Telecom ended limit down following its announcement Tuesday that it plunged into the red in April-September due to a special loss on the sale of its fixed-line unit, revising down its full- year forecasts.
Internet business investor Softbank was beaten down.
Financials such as major brokerages came under downward pressure.
On the sunny side were oil firms Nippon Oil and Showa Shell, together with drug makers Daiichi, Fujisawa and Eisai.
In index futures trading, the December contract on the Nikkei average ended down 280 points at 9,600 on the Osaka Securities Exchange.END
