Tokyo stocks close lower on profit-taking

Madiha Shakeel December 14, 2018

TOKYO: Tokyo stocks closed lower on Friday after two days of rallies as investors locked in profits while awaiting fresh global data for clues on growth in major economies.

The benchmark Nikkei 225 index dropped 2.02 percent, or 441.36 points, to end at 21,374.83, while the broader Topix index lost 1.51 percent, or 24.49 points, to 1,592.16.

“Trade lacks a sense of direction following mixed US stocks indexes and ahead of fresh economic indicators” in China and the United States later Friday, Okasan Online Securities said in a commentary.

A drop in Chinese shares also had a negative impact on investor sentiment, Okasan added.

The dollar fetched 113.53 yen in Asian trade, against 113.60 yen in New York late Thursday.

The European Central Bank (ECB) announced Thursday the end of its “quantitative easing” programme that has seen it pump 2.6 trillion euros ($3 trillion) into the eurozone economy to stoke growth and inflation.

But even after net purchases of government and corporate bonds end, the bank said it will continue to stimulate the economy long into the future while announcing lower growth forecasts.

ECB chief Mario Draghi’s “fear of growing downside risks didn’t do too much damage to the euro”, National Australia Bank said in a note, adding traders were closely watching a set of data due later Friday in China and the United States, including US retail sales.

In Tokyo share trading, Japan Display surged 34.61 percent to 70 yen after a report said it is in talks with Chinese firms over receiving some 50 billion yen ($4.4 billion) in capital investment.

Chip-related shares were among losers, with Tokyo Electron dropping 5.45 percent to 13,345 yen and Advantest off 2.67 percent at 2,076 yen.

Banks also slipped, with Mitsubishi UFJ falling 1.40 percent to 583.1 yen and its rival Mizuho down 0.88 percent at 179.3 yen.

Investors shrugged off the Bank of Japan’s quarterly Tankan business confidence survey, released 10 minutes before the opening bell, that showed no change in business confidence from the previous survey among major manufacturers.

Copyright AFP (Agence France-Press), 2018

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