Nikkei ends first trading day lower as quake, airline collision weigh on sentiment

JAPAN’S Nikkei share average fell as much as 2 per cent on the first trading day of 2024, as airline, construction and utilities reacted to Tuesday’s (Jan 2) aircraft collision and the powerful earthquake that hit western Japan earlier this week.

Chip-related stocks dragged the Nikkei the most on Thursday (Jan 4), tracking overnight weakness of US technology stocks, while the main impact of the quake and collision was on shares in airline, nuclear power plant operators and construction sectors.

The Nikkei trimmed its losses to end 0.53 per cent lower at 33,288.29.

“The Nikkei was dragged lower by technology stocks as well as the earthquake and the airline accident,” said Masahiro Ichikawa, chief market strategist at Sumitomo Mitsui DS Asset Management.

“But gains in US stock futures prompted investors to buy back shares and concerns about the impact of the quake eased.”

The earthquake that hit the western Japan coast on New Year’s Day killed at least 78 people, with rescuers still pressing in their search for survivers.

Utility Hokuriku Electric, whose Shika nuclear power plant is located close to the earthquake epicentre, closed 2.2 per cent lower after falling as much as 8 per cent.

Tokyo Electric Power Holdings pared its 7 per cent losses to end up 2.23 per cent.

Chip-related Advantest and Tokyo Electron slumped 3.79 per cent and 4.95 per cent, respectively.

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Construction firms Kajima and Taisei rose around 4 per cent, each.

Japan Airlines (JAL) cut its 2 per cent loss to end 0.77 per cent higher. The stock faced a glut of early sell orders after Tuesday’s accident involving a collision between a JAL and a Coast Guard aircraft at Tokyo’s Haneda airport.

“The accident seems to have been caused by a human error so that the damage will be limited to JAL as well as to the industry,” said Takamasa Ikeda, senior portfolio manager at GCI Asset Management.

The Nikkei’s decline contrasts with a 0.52 per cent gain of the broader Topix index, as investors sought shares with higher dividend payouts following the launch of a revised tax-free investment scheme Nisa this year.

Topix’s value share index jumped 1.35 per cent, while the growth share index was down 0.3 per cent. REUTERS