INSUBCONTINENT EXCLUSIVE:
TOKYO: Japan's Nikkei tumbled to a one-month low on Thursday and suffered its biggest daily decline since March, hit by a sell-off in
global shares, while tech firms and industrial equipment makers underperformed.
Contributing to Japan's fall was a profit forecast cut by
industrial equipment maker Yaskawa Electric Corp, which dragged down shares of other industrial equipment makers with large exposure to
China.
On Wednesday, Wall Street posted its biggest daily declines in eight months, after European shares had their worst day since June as
concerns around rising debt yields gripped equity markets world-wide.
The Nikkei share average ended 3.9 per cent lower at 22,590.86, the
weakest closing level since Sept
10.
The benchmark index has fallen around 8 per cent from a 27-year high of 24,448.07 hit last week.
Analysts said that the Japanese market,
which was showing signs of overheating, was prone to profit-taking but after a correction is done, the market should be supported by solid
fundamentals.
"Companies will start reporting their July-September earnings soon, and strong results should support the downside of the
market," said Masahiro Fukuda, investment director at Fidelity Investments in Japan.
"Rising yields are not good for stocks for sure, but we
will likely see a recovery in companies' EPS, which is expected to offset the negative impact from high yields."
While all of the Topix's
33 subsectors were in the red, China-related stocks underperformed others.
Yaskawa Electric, which exports factory automation equipment to
China, slashed its annual net profit forecast by 12.6 per cent to reflect weak demand in motion controllers hit by falling capital
expenditure as the Sino-United States trade dispute drags on.
The stock sank 6.1 per cent , while industrial robot maker Fanuc Corp,
Nabtesco Corp and Mitsubishi Electric Corp, slipped 6.8 per cent , 6.0 per cent and 5.1 per cent , respectively.
Chip equipment makers lost
ground on signs of slowing demand in the semiconductor industry, with Tokyo Electron sliding 3.9 per cent , Advantest Corp tanking 4.5 per
cent and silicon products maker Shin-Etsu Chemical declining 4.3 per cent .
SoftBank Corp, which has stakes in global tech companies such as
Alibaba, dropped 5.8 per cent , reflecting weakness in global tech stocks.
Traders said investors are also worried about its Vision Fund's
exposure to United States tech firms and Asian tech firms listed in the United States market and whose shares have been battered
recently.
Shares of cosmetic makers, considered inbound tourism stocks, were also sharply sold, with Shiseido Co and Kose Corp both dropping
6.7 per cent on worries Chinese tourism demand may fall.
Bucking the weakness, discount retailer Don Quijote Holdings Co touched a record
6,800 yen and closed up 10 per cent .
The jump stemmed from an offer by FamilyMart Uny Holdings Co to sell its stake in
general-merchandising unit Uny to Don Quijote for $1.9 billion and get 20 per cent of the chain.
The broader Topix dropped 3.5 per cent to
