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Tokyo: Stocks drop on caution over US stimulus package

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[TOKYO] Japanese shares ended lower on Tuesday, tracking overnight Wall Street losses, as investors cautiously looked to whether US lawmakers could reach an agreement on a stimulus package as a deadline to reach the deal came closer.

The benchmark Nikkei share average dropped 0.44 per cent to close at 23,567.04, while the broader Topix lost 0.75 per cent to 1,625.74.

Stocks extended their losses in the afternoon as investors succumbed to profit-taking and refrained from taking big positions ahead of events such as the US election and earnings results at home and abroad, market participants said.

Overnight, Wall Street's main indexes closed lower as US lawmakers still appeared to struggle to reach an agreement on the coronavirus stimulus.

US House of Representatives Speaker Nancy Pelosi and Treasury Secretary Steve Mnuchin "continued to narrow their differences" in a telephone conversation, Mrs Pelosi's spokesperson wrote on Twitter.

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Mrs Pelosi had said she was optimistic that a legislation could be pushed through before Election Day, Nov 3, but an agreement would have to come by the end of Tuesday for that to happen.

The stocks that gained the most among the top 30 core Topix names were Sony, up 1.83 per cent, followed by Fanuc.

The underperformers among the Topix 30 were East Japan Railway down 4.34 per cent, followed by Central Japan Railway losing 3.23 per cent.

Japan Exchange Group dropped 1.51 per cent after reports that the Financial Services Agency would conduct an on-site investigation of the Tokyo Stock Exchange and may issue a business improvement order after a system failure caused a full-day trade suspension earlier this month.

Tokyo Dome climbed 1.5 per cent following multiple media reports that Hong Kong hedge fund Oasis Management had submitted a request to the company for an extraordinary shareholders meeting to replace top leaders.

The Mothers Index of startup firm shares bucked the overall sombre trend and gained 0.5 per cent.

REUTERS

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