Japanese shares fall on Evergrande jitters; bargain-hunting limits losses
- The Nikkei share average was down 2.03% at 29,880.27, as of 0207 GMT, while the broader Topix lost 1.77% to 2,063.05
TOKYO: Japanese shares fell on Tuesday tracking a sell-off on Wall Street, as fears of a potential default by Chinese developer Evergrande Group drove investors out of equities, though losses were capped as traders scooped up cheap stocks.
The Nikkei share average was down 2.03% at 29,880.27, as of 0207 GMT, while the broader Topix lost 1.77% to 2,063.05.
Growing fears of a possible default by Evergrande rattled global markets on Monday, with the S&P 500 and Nasdaq suffering their biggest daily percentage drop since May.
But market participants said the impact of the sell-off on the Japanese market was limited.
"The market declined, but investors were calm and the mood is rather positive," Shoichi Arisawa, general manager of the investment research department at IwaiCosmo Securities said.
Japan's Nikkei jumped more than 6% since the start of this month as hopes of a new political leadership and falling COVID-19 infections lifted investor sentiment.
"Investors who missed hopping on to the latest rally are now buying shares on dips. They realized how Japanese shares have been cheap following the rally that started late-August."
Index heavyweight SoftBank Group dragged the Nikkei the most, falling 5.36% on Tuesday, followed by supplier of chip equipment Tokyo Electron dropping 2.53% and air-conditioning maker Daikin Industries down 3.57%.
Shares sensitive to global economy also declined, with steel makers losing 3.53% and machinery makers falling 3.01% while shippers slipped 2.89%.
But, travel-related shares rose on hopes of an economic reopening as Tokyo witnessed a drop in COVID-19 infections.
Airliners ANA Holdings rose 1.7% and Japan Airlines gained 3.09%. Central Japan Railway, which runs bullet trains between Tokyo and Osaka, gained 1.2%.
Daiichi Sankyo was the best performer on the Nikkei with gains of 7.43%, followed by Kansai Electric Power, which rose 1.17%.
TOTO Ltd fell 6.06%, making it the worst performer in the index, while Komatsu lost 4.95%.
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