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Tokyo: Shares end lower on fears of another coronavirus wave
[TOKYO] Japanese shares slipped to near three-week low on Monday as concerns about a spike in new cases of Covid-19 worldwide poured cold water on hopes of a quick recovery from a coronavirus-driven global recession.
The benchmark Nikkei average dropped plunged 3.47 per cent to 21,530.95, its lowest since May 27, slipping below a key support of the 200-day moving average, which stood at 21,755.
As new coronavirus cases resurfaced in China and the United States, worries about a second wave have deepened, prompting fears about prolonged damage to the economy.
"US shares had become very expensive, reaching levels above which further gains cannot be justified. And if US shares won't rise, Japanese shares will have no choice but to pause," said Hiroki Takashi, chief strategist at Monex Securities.
On the Nikkei index, there were 5 advancers against 219 decliners, with cyclical shares leading the losses.
Airlines, one of the hardest-hit victims of the pandemic, lost 4.96 per cent as concerns about the virus reared their head.
The broader Topix lost 2.54 per cent to 1,537.89.
The market showed muted response to a barrage of Chinese economic data that was slightly weaker than expected.
China's industrial output rose for a second straight month in May but the gain was smaller than expected, suggesting the economy was still struggling to get back on track after the virus crisis.