Tokyo: Nikkei loses most in 3 weeks on Ukraine, US inflation risks

[TOKYO] Japan's Nikkei index fell on Monday (Feb 14) by its most in nearly 3 weeks, dragged down by technology stocks, on investor concerns over escalating tensions surrounding Ukraine and broadening inflationary risks.

The Nikkei share average lost 2.23 per cent to close at 27,079.59, posting its biggest daily percentage drop since Jan 27 and touching below the 27,000 level for the first time since Jan 31. The broader Topix lost 1.63 per cent to 1,930.65.

"Because the market was closed (in Japan) on Friday, today's market was hit by 2 separate negative news that happened last week - tensions surrounding Ukraine and Russia, and the sharp rise in US consumer prices," said Shuji Hosoi, a senior strategist at Daiwa Securities.

"If the Ukraine situation gets worse, the market could fall further."

Wall Street ended sharply lower on Friday for the second straight session, as investors fretted about deepening tensions between Russia and the West over Ukraine, US inflation and prospects of aggressive interest rate hikes by the Federal Reserve.

Data from the Labor Department showed US consumer prices last month surged 7.5 per cent year-over-year, topping economists' estimates of 7.3 per cent and marking the biggest annual increase in inflation in 40 years.

In Japan, market heavyweights fell, with Uniqlo clothing shop owner Fast Retailing losing 3.09 per cent, technology investor SoftBank Group slipping 3.92 per cent while air-conditioner maker Daikin Industries dropped 4.1 per cent.

Tyre maker Bridgestone tumbled 8.92 per cent and was the worst performer in the Nikkei, followed by online medical platform M3, which fell 7.08 per cent.

Oil explorers was the top gainer among the exchange's 33 industry sub-indexes with a 6.24 per cent jump. Inpex rose 6.56 per cent and Japan Petroleum Exploration gained 6.92 per cent.

Oil prices hit their highest in more than seven years on fears that a possible invasion of Ukraine by Russia could trigger US and European sanctions that would disrupt exports from the world's top producer in an already tight market. REUTERS