Nikkei slides as spiking Covid-19 cases bruise retail, services shares

TOKYO: Japan’s Nikkei share average dropped on Thursday, as a jump in COVID-19 cases spurred a sell-off in retailers and other service providers, with technology stocks also witnessing a slide.

The Nikkei shed 0.86% to 28,658.22 by the midday break. The broader Topix fell 0.58%.

Japan recorded a surge in new cases on Wednesday, with infections reaching four-month highs in the major metropolitan areas of Tokyo and Osaka as the Omicron variant spreads. Chief Cabinet Secretary Hirokazu Matsuno said the nation “must brace for the rapid spread of infections to continue.”

Cinema operator Toho was the Nikkei’s biggest loser, dropping 4.98%. Retail conglomerate Aeon was a close second, declining 4.77%. Uniqlo store operator Fast Retailing slumped 1.44%.

“Investors are starting to think that economic normalization will be delayed, and that’s weighing on sentiment,” said a market participant at a domestice securities firm. The tech sector also tumbled, despite starting the trading day in the green. Olympus shed 4.61% and electrical equipment maker YASKAWA lost 4.50%.

The biggest chipmakers on the Nikkei though trade mixed, with Tokyo Electron dropping 0.45% and Advantest jumping 1.12%. Overnight, tech stocks led the rally on Wall Street, with the Philadelphia SE Semiconductor Index rising 0.66%.