Nikkei Stock Average Plunges Amid Uncertainty in World Economy and Tightening US Monetary Policy

Nikkei Stock Average Plunges Amid Concerns Over Global Economy

In a significant downturn, the Nikkei Stock Average plummeted by 565.68 yen to close at 32,773.02 yen on the Tokyo stock market. This decline was influenced by the overall uncertain outlook for the world economy and apprehensions surrounding an extended tightening of US monetary policy. The negative sentiment led to a consecutive three-day drop, making it the third-largest decline this year.

Cautionary Selling and Negative Market Factors Contribute to the Downturn

A combination of factors, including caution against selling exchange-traded funds (ETFs) to generate distributions, contributed to the downward trend of Japanese stocks. Furthermore, the Asian market experienced a sharp decline in the Hang Seng index, and US stock futures showed signs of anaerobic movement with widespread declines and the strengthening of the Yen.

Hiroshi Namioka, chief strategist at T&D Asset Management, indicated that the Nikkei stock average is currently within a high price range due to the aftermath of the burst bubble economy and a sense of overheating. Namioka predicts heightened investor caution until mid-July, stating, “For now, supply and demand factors will continue to pose challenges, and market sentiment will remain difficult to improve.”

Market Highlights and Stock Performance

During morning trading, TOPIX experienced a decline of 0.82% to reach 2287.07 points. The primary market trading value on the Tokyo Stock Exchange amounted to 3,569,803 million yen. The entire spectrum of 33 industries on the Tokyo Stock Exchange witnessed a downturn, with machinery, precision equipment, other products, other financial industries, and non-ferrous metals being the most affected sectors.

Individually, several Nikkei 225 stocks, including Fast Retailing, Tokyo Electron, Daikin Industries, Softbank Group, and Advantest, experienced substantial declines. Conversely, Ajinomoto, Recruit Holdings, and Otsuka Holdings showed an upward trend.

Socioext suffered a considerable drop of 5,000 yen (22.78%) to 16,950 yen, hitting the stop price limit. The trading volume for Socioext reached 137,800 shares. Disappointment arose from the announcement that major shareholders such as the Development Bank of Japan, Fujitsu, and Panasonic Holdings had decided to sell all their holdings.

In the primary market of the Tokyo Stock Exchange, 318 stocks rose (17%), 1,477 stocks fell (80%), and 40 stocks remained unchanged (2%).

Closing Price and Market Figures

• Nikkei Average: 32,773.02 (-565.68) yen
• ＴＯＰＩＥ: 2,287.08 (-28.95) points
• Main Index: 1,171.81 (-14.92) points
• Standard Index: 1,111.16 (-11.72) points
• Growth Index: 1,000.80 (-29.62) points

TSE trading volume: 1,500,1800 shares

TSE trading value: 3,569,803 million yen

[TOKYO (Reuters)]- The Nikkei Stock Average fell 565.68 yen from the previous business day to 32,773.02 yen on the Tokyo stock market, ending trading after a significant fall. Asian stocks and US stock futures fell due to uncertainty about the future of the world economy and worries about a prolonged tightening of US monetary policy, and Japanese stocks also fell. The price fell for three consecutive days due to a combination of negative factors such as caution against selling exchange traded funds (ETFs) to generate distributions. This was the third biggest decline of the year.

On July 6th, the Nikkei Stock Average fell 565.68 yen from the previous business day to 32,773.02 yen on the Tokyo stock market, ending the trading session with a sharp decline. The picture is a stock price board in Tokyo. December 2015 (2023 REUTERS/Toru Hanai)

The Nikkei Stock Average continued to decline even after closing at a low of 405 yen, followed by a scene when it fell 700.98 yen to a low of 32,637.72 yen. In addition to the sharp decline of the Hang Seng index in the Asian market, US stock futures were anaerobic, such as the decline of the three indices across the board and the appreciation of the Yen.

Hiroshi Namioka, chief strategist at T&D Asset Management, said the Nikkei stock average is in a high price range after the collapse of the bubble economy and a sense of overheating. He also said that investors are likely to become more cautious until mid-July, saying, “For now, the supply and demand side will continue to be a burden, and sentiment will remain difficult to attack. “

TOPIX ended the morning trading down 0.82% at 2287.07 points. The Tokyo Stock Exchange’s primary market trading value was 3,569,803 million yen. All 33 industries on the Tokyo Stock Exchange fell. Machinery, precision equipment, other products, other financial industries, and non-ferrous metals were the best performers.

Individually, Nikkei 225 stocks such as Fast Retailing, Tokyo Electron, Daikin Industries, Softbank Group, and Advantest have fallen sharply. On the other hand, Ajinomoto, Recruit Holdings and Otsuka Holdings rose.

Socioext fell 5,000 yen (22.78%) from the previous day to 16,950 yen, which was commensurate with the stop price. The trading volume was 137,800 shares. The announcement the day before that the largest shareholder, the Development Bank of Japan, as well as the main shareholders, Fujitsu and Panasonic Holdings, had decided to sell all their holdings was disappointing.

In the primary market of the Tokyo Stock Exchange, 318 stocks rose (17%), 1477 stocks fell (80%), and 40 stocks (2%) remained unchanged.

Final Price Change from previous day Open Low/High

Nikkei Average 32773.02 -565.68 33058.40 32,637.72─33,079.45

ＴＯＰＩＥ 2277.08 -28.95 2292.86 2,270.20─2,295.95

Main Index 1171.81 -14.92 1180.44 1,168.34─1,181.50

Standard Index 1111.16 -11.72 1118.26 1,109.74─1,118.82

Growth index 1000.80 -29.62 1018.74 998.47─1,020.79

TSE trading volume (10,000 shares) 150018 TSE trading value (100 million yen) 35698.03

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