TOKYO: Tokyo stocks fell sharply on Monday morning as concerns for China’s economy following weaker-than-expected manufacturing data served as a cue for investors to lock in recent gains.
The 225-issue Nikkei Stock Average shed 357.36 points, or 1.87 percent, from Friday to end the morning at 18,725.74. The broader Topix index of all First Section issues on the Tokyo Stock Exchange was down 29.80 points, or 1.91 percent, to 1,528.40.
Every industry category on the main section lost ground except glass and ceramics, with decliners led by iron and steel, shipping and land transport issues.
Stocks opened sharply lower before gradually extending losses during the morning, with investor sentiment stifled after official October purchasing managers’ index data for China’s manufacturing sector came in at 49.8 on Sunday, unchanged from September’s figure and representing a slight contraction in business activity.
“The Chinese data and Friday’s soft U.S. consumer spending indicators combined to trigger selling in the morning, with Tokyo stocks considered technically overvalued following broad gains in the past several weeks,” said Maki Sawada of Nomura Securities Co.’s investment research department.
Most market forecasters expected an official manufacturing PMI of 50.0, representing neither expansion nor contraction in business activity, in light of recent Chinese stimulus efforts, Sawada said.
The private-sector Caixin PMI for October, released midmorning, also showed a contraction in China’s manufacturing sector, albeit at a slower pace than in September.
On the First Section, declining issues outnumbered advancing ones 1,505 to 315, while 86 ended the morning unchanged.
Half-year earnings reports and annual profit forecasts continued to heavily sway individual issues.
