Tokyo stocks close lower on concerns over fresh virus emergency

2021-04-23 13:36:58 GMT2021-04-23 21:36:58(Beijing Time) Xinhua English

TOKYO, April 23 (Xinhua) -- Tokyo stocks closed lower Friday after inheriting a weak lead from Wall Street overnight on concerns abut plans to hike the capital gains tax, while fears grew over the economic fallout from Japan declaring a fresh virus emergency for Tokyo and other big regions.

The 225-issue Nikkei Stock Average dropped 167.54 points, or 0.57 percent, from Thursday to close the day at 29,020.63.

The broader Topix index of all First Section issues on the Tokyo Stock Exchange, meanwhile, lost 7.52 points, or 0.39 percent, to finish at 1,914.98.

Local dealers said that sentiment was initially dented by reports the U.S. government is planning to hike the capital gains tax and Tokyo trading got off to a shaky start as issues here tracked their U.S. peers lower overnight.

"Investor sentiment was hurt by the decline in the U.S. market, which has rallied so far," Shingo Ide, chief equity strategist at the NLI Research Institute, was quoted as saying.

"There were concerns that some investors will secure gains before a tax increase, but the tax story wouldn't have a big effect on the Tokyo market," added Ide.

But trading moves were mainly directed by Japanese Prime Minister Yoshihide Suga declaring a third state of emergency for Tokyo and the three western prefectures of Osaka, Kyoto and Hyogo, with investors concerned about the economic impact the fresh COVID-19 restrictions will have.

The new state of emergency is set to run from Sunday through May 11.

"Although investors have somewhat factored in the emergency declaration, there was anxiety about a lack of stimulus measures to cushion a possible negative economic impact from the declaration," Koichi Fujishiro, a senior economist at Dai-ichi Life Research Institute, was quoted as saying.

Under the new state of emergency, local prefectures may request that commercial facilities including shopping malls and amusements parks be temporarily closed, with restaurants and bars being asked to suspend their businesses or be barred from serving alcohol at weekends.

Large sporting events, such as baseball and soccer, may also be asked to hold games without spectators

Other investment strategists suggested that the market has been rattled by the COVID-19 emergency state, with Koichi Kurose, chief strategist at Resona Asset Management, quoted as saying, "The market sentiment has gotten weaker since reports on the virus emergency measures started floating this week."

By the close of play, iron and steel, machinery, and oil and coal product-linked issues comprised those that declined the most.

Transportation issues, battered during the market's recent losing streak, were bought back at reasonable prices, despite concerns domestic travel will be dramatically impacted by the state of emergency which covers the Golden Week holidays, usually one of the busiest times of travel for Japanese people.

Odakyu Electric Railway added 2.7 percent, Central Japan Railway Co., meanwhile, ended the day 2.5 percent higher.

But tech-oriented issues weighed on the market, with Shin-Etsu Chemical and Sumco both dropping 1.4 percent. Screen Holdings lost 3.1 percent, while precision motor maker Nidec tumbled 5.1 percent, after its earnings forecast for this business year missed median analysts' expectations.

Issues that fell outpaced those that rose by 1,376 to 708 on the First Section, while 106 ended the day unchanged.

On the main section on Friday, 955.01 million shares changed hands, dropping from Thursday's volume of 1,083.55 million shares.

The turnover on the final trading day of the week came to 2,004.40 billion yen (18.62 billion U.S. dollars). Enditem

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