Nikkei Stock Average Drops in Tokyo Market Amid Uncertainty and Selling Pressure

On October 30th, the Nikkei Stock Average on the Tokyo stock market experienced a significant decline of 294.73 yen from the previous business day, closing at 30,696.96 yen. The market was primarily influenced by external uncertainties, including concerns over the situation in the Middle East, as well as selling pressure driven by the financial results of individual companies. Prices in the main market dropped by over 80%, with a peak decline surpassing 400 yen.

The day began with the Nikkei average already 328 yen lower than the previous trading day, and it continued to slide throughout the day, ultimately falling by 453 yen to 30,538.29 yen. Although there was some resistance at the 30,500 yen level, the overall market sentiment remained weak.

While high-tech stocks, particularly those associated with semiconductors, demonstrated resilience, there were noticeable declines in auto and pharmaceutical stocks. Market participants noted that there was no clear direction in terms of domestic or external demand.

In relation to the Middle East situation, the Israeli army intensified its ground attacks on the Palestinian autonomous region of Gaza, leading to heavy airstrikes and shootings. Chief strategist and fund manager Hiroshi Namioka from T&D Asset Management commented that this intensified conflict had a strong impact on market sentiment. Furthermore, companies that had revised their earnings forecasts downwards faced additional selling pressure, making active buying challenging.

However, as we look ahead, market participants are expected to shift their focus away from the Middle East situation, while the anticipated increase in US interest rates is likely to slow down. Namioka expressed this sentiment.

On this day, TOPIX closed 1.04% lower at 2,231.24 points, while the TSE Main Market Index experienced a 1.03% decline from the previous business day, closing at 1,148.34 points. The trading value in the main market amounted to 5,667,449 million yen. Among the 33 industries on the TSE, only the electricity/gas and electrical equipment sectors saw price increases, while the other 31 industries, including transportation equipment, pharmaceuticals, and textiles, witnessed declines.

Individually, Ajinomoto (2802.T) and Hino Motors (7205.T) underperformed, with even the mainstay Toyota Motor Corporation (7203.T) experiencing a decrease in stock value. In contrast, Tokyo Electron (8035.T) remained relatively stable.

In the TSE prime market, 206 stocks rose (12%), 1,422 stocks fell (85%), and 27 stocks remained unchanged (1%).

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On October 30th, the Nikkei Stock Average on the Tokyo stock market fell 294.73 yen from the previous business day to 30,696.96 yen, closing down. Photo taken at TSE in October 2020 (2023 Reuters/Issei Kato)

TOKYO (Reuters) – On the Tokyo stock market, the Nikkei average fell 294.73 yen from the previous business day to 30,696.96 yen, closing down. The market was weighed down by uncertainty in the external environment, including concerns about the situation in the Middle East, and selling based on the financial results of individual companies. In the main market, prices fell by more than 80%, with the decline exceeding 400 yen at one point.

The Nikkei average started the day 328 yen lower than the previous trading day. After that, the price continued to fall, falling 453 yen to 30,538.29 yen at the end of the market. The price was reluctant to fall below the 30,500 yen level, but remained weak throughout the day.

Looking for trends, high-tech stocks such as those related to semiconductors are solid. The rise in the Philadelphia Semiconductor Index (SOX index) in the US market last weekend was positive. On the other hand, there were notable reductions in auto and pharmaceutical stocks, but market participants pointed out that “no major direction can be seen in terms of domestic or external demand” (Securities/Japanese strategist).

Regarding the situation in the Middle East, as the Israeli army intensified its ground attacks on the Palestinian autonomous region of Gaza, heavy airstrikes and shootings took place in the early hours of the 30th in northern Gaza. “Market sentiment is strong,” said Hiroshi Namioka, chief strategist and fund manager at T&D Asset Management. Other companies that had revised their earnings forecasts down were also weighed down by selling, making active buying difficult.

However, going forward, the attention of market participants is expected to shift from the situation in the Middle East, and the increase in US interest rates is also expected to come to a halt. ,” Namioka said.

TOPIX closed 1.04% lower at 2,231.24 points. The TSE Main Market Index was 1,148.34 points, down 1.03% from the previous business day. The trading value in the main market was 5,667,449 million yen. Among the 33 industries on the TSE, prices rose in two industries: electricity/gas and electrical equipment, while prices fell in 31 industries, including transportation equipment, pharmaceuticals, and textiles.

Individually, Ajinomoto (2802.T) and Hino Motors (7205.T) are weak. Mainstay Toyota Motor Corporation (7203.T) also fell. On the other hand, Tokyo Electron (8035.T) is still steady.

In terms of the number of ups and downs in the TSE prime market, 206 stocks rose (12%), 1,422 stocks fell (85%), and 27 stocks remained unchanged (1%).

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