Tokyo: Stocks fall as risks on several fronts unsettle investors

[TOKYO] Japanese stocks fell on Thursday as fading hopes for a new round of US fiscal stimulus, a return of coronavirus lockdowns in Europe and worries about Sino-US tensions hurt sentiment.

The Nikkei index ended 0.51 per cent lower at 23,507.23, with the healthcare and telecommunications sectors leading the decline. The broader Topix fell 0.74 per cent to 1,631.79.

US Treasury Secretary Steve Mnuchin said reaching a compromise with the Democrats on a fiscal stimulus was unlikely before the Nov 3 election, raising concerns about the economic outlook for an economy reeling from the impact of the Covid-19 pandemic.

Sentiment also worsened after sources told Reuters the US State Department has submitted a proposal for President Donald Trump administration to add China's Ant Group to a trade blacklist, which could complicate its highly-anticipated initial public offering.

Britain has introduced a new lockdown system, France imposed curfews and other European nations were closing schools to stop a second wave of the novel coronavirus.

"We believe the momentum underlying the current recovery will slow down gradually," Soichiro Matsumoto, chief investment officer for Japan at Credit Suisse, wrote in a memo.

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"The first factor is a potential tightening of restrictions on economic activity due to a second wave of Covid-19 infections. Another factor is increasingly enervated fiscal policy."

The biggest underperformers among the top 30 core Topix names were venture capitalist SoftBank Group, down 2.08 per cent, followed by drugs maker Takeda Pharmaceutical losing 1.97 per cent.

The stocks that gained the most among Topix 30 were electronic parts maker Murata Manufacturing, up 1 per cent, followed by industrial conglomerate Mitsubishi gaining 0.42 per cent.

There were 64 advancers on the Nikkei index against 156 decliners.

The volume of shares traded on the Tokyo Stock Exchange's main board was 890 million, compared with the average of 1.11 billion in the past 30 days.

REUTERS