Nikkei sinks to one-month low on new virus variant, China tech crackdown news

27-Nov-2021 Intellasia | Reuters | 5:02 AM Print This Post

Japan’s Nikkei slumped on Friday to its lowest level in a month as a new coronavirus variant found in South Africa raised an alarm, while the news that Beijing has asked Chinese hailing giant Didi (DIDI.N) to delist from New York also soured the mood.

The Nikkei average (.N225) dropped 2.53 percent to 28,751.62, its lowest finish since October 25, and posting its biggest daily fall in more than five months. The broader Topix (.TOPX) fell 2.01 percent to a six-week closing low of 1,984.98.

For the week, the Nikkei lost 3.3%, while the Topix fell 2.9%, marking the biggest decline since the last week of September.

“The market’s fundamentals have been weak as investors kept selling when the Nikkei got closer to 30,000,” said Kazuharu Konishi, head of equities at Mitsubishi UFJ Kokusai Asset management.

“So, it easily got damaged by negative news, such as the one about the new virus variant. Although it might be too rough to conclude that today’s declines were only due to the virus.”

The variant, detected in South Africa, may be able to evade immune responses and has prompted Britain to hurriedly introduce travel restrictions on South Africa.

The news hit travel-related shares, which had been benefiting from a surge in domestic consumption due to successful containment of the virus, the hardest.

Topix airline shares index (.IAIRL.T) dropped 5.4 percent to a seven-month low while Topix land transport index (.IRAIL.T), made up mainly of train operators, lost 2.9 percent to a one-year low.

ANA Holdings (9202.T) fell 4.5 percent after the airliner raised funds through a sale of convertible bonds, a move that highlighted the difficulty facing the industry.

Among railway operators, Keisei Electric Railway (9009.T) fell 6.3 percent to become the worst performer in the Nikkei.

Central Japan railway (9022.T) lost 3.3%, while Western Japan Railway (9021.T) shed 3.2%.

Softbank Group (9984.T) tumbled 5.2 percent after Bloomberg reported Chinese regulators have asked top executives of ride hailing giant Didi Global to devise a plan to delist from the New York Stock Exchange due to concerns about data security.

The Japanese conglomerate is a large investor in US-listed Chinese tech firms, including Didi and Alibaba.


Category: China, Japan

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