Views Article – Sharenet Wealth

Asia, News

Nikkei edges down; China virus fears hit airlines

By Hideyuki Sano

TOKYO, Jan 21 (Reuters) – Japanese shares dropped on Tuesday, with airlines leading the decline as an outbreak of a new coronavirus has spread to more Chinese cities, stoking fears of a wider epidemic that could hamper the economic activity in the region.

Profit-taking was also ripe after the market hit a 15-month high the previous day, especially in recent gainers such as semiconductor-related shares.

The Nikkei share average fell 0.82% to 23,886.99 and the broader Topix lost 0.56% to 1,734.46 ahead of a central bank policy meeting outcome.

Airline shares dropped 1.6% to become the worst performing sector as the virus outbreak fanned worries that it will spread globally as Chinese travellers take flights abroad for the week-long holiday starting this week.

China’s health authorities said the virus can pass from person-to-person. Three other countries — Japan, South Korea and Thailand — have confirmed cases already.

Shiseido, cosmetic maker that has benefitted from strong demand in China and from Chinese tourists, also dropped 2.5% to become the worst performer among the Nikkei constituents.

But anxiety over the virus outbreak has brought a windfall to some others.

Azearth, a supplier of protective attire, jumped 16.2% to the day’s limit, while Airtech Japan, which manufactures air shower and other air purifying products, gained 10.6%.

Shikibo, which produces anti-virus mask, gained 6.5%.

Elsewhere, Maeda Road Construction soared for a second day after its parent company Maeda Corp said on Monday it would launch an unsolicited bid to gain a controlling stake in the road builder.

Hopes of more industry consolidation have helped to lift the entire sector. The Tokyo Stock Exchange’s construction company index rose 0.9% to a 15-month high.

On the other hand, Toshiba Machine tumbled 8.8% as the price of a takeover bid launched by an investment fund backed by veteran Japanese activist investor Yoshiaki Murakami fell short of market expectations.

Chip-related shares gave in to profit-taking, with Screen Holdings dropping 2.8%, while Tokyo Electron lost 2.2%.

The yen ticked up 0.15% to 109.99 to the dollar as caution over the new virus lifted the safe-haven currency. A stronger yen eats into exporters’ foreign earnings and profits. (Editing by Subhranshu Sahu)


© 2019 Thomson Reuters. All rights reserved. Reuters content is the intellectual property of Thomson Reuters or its third party content providers. Any copying, republication or redistribution of Reuters content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters. Thomson Reuters shall not be liable for any errors or delays in content, or for any actions taken in reliance thereon. "Reuters" and the Reuters Logo are trademarks of Thomson Reuters and its affiliated companies.
Array ( )