Tokyo: Stocks slip as economy shrinks at record rate on pandemic hit

[TOKYO] Japanese stocks fell on Monday by the most in over two weeks after data showed the country's economy shrank at a record pace in the second quarter as the Covid-19 pandemic crimped consumer spending. Investors took the data in their stride and locked in profits as the economy slowly emerges from lockdowns. Markets did not react to a domestic media report that Prime Minister Shinzo Abe has entered hospital for an examination.

Industrial and healthcare stocks pulled down the Nikkei 225 Index 0.83 per cent to 23,096.75, its biggest one-day fall since July 31. The broader Topix was down 0.84 per cent.

Some investors sold shares of companies that recently reported favourable earnings. Others booked profits on companies in healthcare and technology that have risen sharply due to expectations that these sectors would benefit from the pandemic.

"The stock market could take some time to catch its breath, because it has already priced in a lot of positive factors," said Masayuki Kichikawa, chief macro strategist at Sumitomo Mitsui Asset Management Co.

"I don't expect a big selloff. Countries have been able to balance containing the virus without restricting economic activity."

The underperformers among the top 30 Topix names were job placement company Recruit Holdings, down 3.17 per cent, followed by drugs maker Daiichi Sankyo, losing 2.21 per cent.

The Topix 30 stocks that gained the most were industrial conglomerate Hitachi, up 1.15 per cent, followed by Honda carmaker Motor Co, gaining 0.7 per cent.

There were 44 advancers on the Nikkei index against 173 decliners.

The volume of shares traded on the Tokyo Stock Exchange's main board was 0.82 billion, compared with the average of 1.22 billion in the past 30 days.

REUTERS