Japanese Shares Trade Sharply Lower as Middle East Tension Rises

Reuters

12:12 JST, October 16, 2023

TOKYO (Reuters) – Japanese shares traded sharply lower on Monday, dragged by chip-related shares, with risk appetite being hurt as tensions in the Middle East escalated.

The Nikkei index .N225 fell 1.64% to 31,786.78 by the midday break, while the broader Topix .TOPX lost 1.28% to 2,279.29.

“As risks for the Middle East rose, investors braced for further declines in markets and cut their long positions in stocks,” said Takehiko Masuzawa, head of trading at Phillip Securities Japan.

The Nikkei 225 volatility index .JNIV jumped 4.29%, the most since Oct. 4 when the Nikkei lost 2.3% in its biggest daily decline in two months.

On Friday, the S&P 500 .SPX and the Nasdaq .IXIC fell as deteriorating consumer sentiment data and the Middle East conflict soured investors on riskier bets. The Dow Jones Industrial Average .DJI inched up 0.12%.

Heavyweight chip-related stocks fell, tracking U.S. technology stocks, with Tokyo Electron 8035.T and Advantest 6857.T falling 3.18% and 4.53%, respectively.

Technology start-up investor SoftBank Group 9984.T slipped 1.38%.

Bucking the trend, Lawson 2651.T jumped 3.1% after raising its annual profit forecast on robust performance at its convenience stores.

Ryohin Keikaku 7453.T surged 11.48% after the operator of retail outlet brand Muji reported an annual profit forecast that beat market consensus.

All but three of 33 industry sub-indexes on the Tokyo Stock Exchange fell.

Energy explorers .IMING.T jumped 3.02% to become the top performer among the sub-indexes, with Inpex 1605.T jumping 3.2% to become the top performer on the Nikkei.

Refiners .IPETE.t rose 1.6%, with Eneos Holdings 5020.T rising 2.33%.