TOKYO: Japanese shares reversed early gains on Monday as caution ahead of the formation of a new government and lingering worries over the China Evergrande debt crisis outweighed positive sentiment stemming from a strong Wall Street finish last week.
The Nikkei share average lost 1.14% to 28,441.89 by 0206 GMT, with technology and shipping stocks leading the decline. Earlier in the session, it rose as much as 1.16% after five straight sessions of losses. The broader Topix fell 0.72% to 1,972.09.
"The market started falling as soon as it hit its highest level for the session. This is a typical move when selling pressure is strong," said Tomoichiro Kubota, a senior market analyst at Matsui Securities.
"The market is facing a triple pain now, with signs of Chinese economic slowdown and the US budget issues. Also, we cannot expect similar monetary policies from Japan's new cabinet as we had under the Abenomics."
The Evergrande debt crisis continued to cast doubt over China's economic growth, while the fate of the Biden Administration's flagship spending bills is not clear yet.
Japan's incoming prime minister Fumio Kishida is set to formally take office on Monday and so far, he has failed to impress investors, market participants said.
Chip-making equipment maker Tokyo Electron dragged down the Nikkei the most, with a 3.21% drop. Technology start-up investor SoftBank Group fell 2.52% and robot maker Fanuc lost 3.91%.
Shippers tumbled 8.24%, with Kawasaki Kisen losing 8.59%.
Department store operators rose after Japan lifted its COVID-19 emergency measures last week, with Isetan Mitsukoshi Holdings climbing 4.55%, J.Front Retailing gaining 4.39% and Takashimaya up 3.86%.
Airlines jumped 2.49%.
Comments
Comments are closed.