Tokyo stocks close lower on soaring oil prices

2021-10-12 10:35:59 GMT2021-10-12 18:35:59(Beijing Time) Xinhua English

TOKYO, Oct. 12 (Xinhua) -- Tokyo stocks closed lower on Tuesday, as market sentiment was weighed down by the soaring oil prices which are considered risks for market, causing concerns over rising prices and growing trade deficit.

The 225-issue Nikkei Stock Average finished down 267.59 points, or 0.94 percent, from Monday at 28,230.61.

The broader Topix index of all First Section issues on the Tokyo Stock Exchange ended 13.90 points, or 0.70 percent, lower at 1,982.68.

Higher oil prices raised concerns about the possible expansion of Japan's trade deficit, as surging energy prices would lead to a sharp increase in the value of imports and increase the demand for U.S. dollars to purchase oil, said Yuji Saito, head of the foreign exchange department at Credit Agricole Corporate & Investment Bank in Tokyo.

In the stock market, investors locked in gains coming from the overnight decline in U.S. stocks the previous day. Soaring crude oil futures closed at about a seven-year high and caused worries on price increases, as they are usually regarded as a negative factor for stocks that could squeeze corporate profits, brokers said.

Besides, rising interest rates in the United States are also considered as market risks as they increase the companies' borrowing costs, brokers said.

"Investors took profits as Wall Street fell, with electric power and air transportation sectors hit by rising oil costs," said Seiichi Suzuki, chief equity market analyst at the Tokai Tokyo Research Institute.

But Suzuki added rising oil prices stimulated oil prospectors, nonferrous metal manufacturers and trading companies in Japan, and the stock markets would reverse their downtrend if the upcoming U.S. quarterly earnings result turned out as positive.

Explorer Inpex increased 1.8 percent, Nippon Light Metal Holdings gained 2.4 percent, and trading house Mitsubishi advanced 2.3 percent.

In the First Section, decliners outnumbered advancers 1,743 to 375, while 65 finished unchanged.

Among electric power and gas issues, Chubu Electric Power declined 1.6 percent and Kansai Electric Power slid 1.9 percent.

As for airlines, Japan Airlines sank 2.2 percent and ANA Holdings fell 2.0 percent.

Trading volume on the main section declined to 1,134.93 million shares from Monday's 1,194.17 million shares. Enditem