Nikkei tanks more than 6% as oil prices surge
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[TOKYO] Japan’s Nikkei average fell more than 6 per cent in a broad selloff on Monday after oil prices surged, stoking fears of inflation and economic slowdown.
The Nikkei fell 6.3 per cent to 52,091.74 as of 0033 GMT. The broader Topix slipped 5.39 per cent to 3,514.97.
“Market players want to sell any risk assets for cash,” said Shoichi Arisawa, general manager of the investment research department at IwaiCosmo Securities.
“Investors are worried about the negative effect of the oil price surge on corporate profits. Also, inflation would slow down consumption, slowing down the economy.”
Oil prices surged about 20 per cent in early trade on Monday, hitting their highest since July 2022, as the expanding US-Israeli war with Iran fuelled fears of tighter supply and prolonged disruptions to shipments through the Strait of Hormuz.
Meanwhile, Iran on Monday announced Mojtaba Khamenei to succeed his father, Ali Khamenei, as supreme leader, signalling that hardliners remain firmly in charge, as the week-old US-Israeli war with Iran pushed oil above US$100 a barrel.
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All but three of the Nikkei’s 225 components fell.
Chip-related shares fell, with Advantest and Tokyo Electron lost 9.5 per cent and 7.2 per cent, respectively.
Technology investor SoftBank Group lost 9.45 per cent.
Oil explorer Inpex rose 1.86 per cent.
The Topix’s mining index rose 1 per cent and was the only rising index among the Tokyo Stock Exchange’s 33 industry sub-indices. REUTERS
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