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Tokyo: Nikkei closes down more than 1.2%

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Tokyo's benchmark Nikkei index ended down over 1.2 per cent on Thursday after European and US stock markets plunged on worries over resurgent coronavirus infections.

[TOKYO] Tokyo's benchmark Nikkei index ended down over 1.2 per cent on Thursday after European and US stock markets plunged on worries over resurgent coronavirus infections.

The Nikkei 225 fell 1.22 per cent or 274.53 points to close at 22,259.79 while the broader Topix index was down 1.18 per cent or 18.65 points at 1,561.85.

"Risk sentiment reversed sharply overnight as virus cases rising in the US endangers the pace of the tentative recovery seen in the data to date," said Tapas Strickland, director of economics and markets at National Australia Bank.

"We had been noting for some time that markets were trying to grapple with the implications of rising virus cases given the high bar to re-impose restrictions.

"What changed overnight were signs of companies and consumers appearing to act ahead of officials," he said in a commentary, pointing to a dive in restaurant bookings and Nike closing several stores.

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Key indexes on Wall Street plunged more than 2 per cent Wednesday, while European markets sank amid virus fears and rekindled trade tensions between Brussels and Washington.

The US government said it is considering new taxes on US$3.10 billion in European imports amid a dispute over subsidies to plane maker Airbus, just days after the EU indicated it plans to move forward on a digital tax that would primarily hit US tech titans.

Updated International Monetary Fund economic forecasts also hit investor sentiment, with the institution predicting the global economy would contract by 4.9 per cent this year and warning the downturn is a "crisis like no other".

The dollar was trading at 107.16 yen in Asian afternoon trade, compared with 107.05 yen in New York Thursday afternoon.

In Tokyo, NEC jumped 2.37 per cent to 5,170 yen after the electronics giant said it was talking with telecom group NTT on a capital and business tie-up for 5G wireless technology development. Local media said the two firms were expected to announce the deal later in the day.

NTT slipped 0.71 per cent to 2,491 yen.

Automakers and airlines were sharply lower, with Toyota Motor down 2.60 per cent at 6,795 yen and Japan Airlines off 4.12 per cent at 1,975.5 yen.

Olympus jumped 11.15 per cent to 2,132.5 yen after it announced plans to sell its struggling camera division to focus on medical equipment.

AFP

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