Tokyo stocks closed sharply lower on Tuesday, with the benchmark Nikkei stock index ending at a four-month low amid a global rout triggered by concerns that the global economy could be hampered if the coronavirus spreads further. The 225-issue Nikkei Stock Average tumbled 781.33 points, or 3.34 percent, from Friday to 22,605.41, marking its lowest closing level since October 21, 2019, Xinhua news agency reported.
The broader Topix index of all First Section issues on the Tokyo Stock Exchange, meanwhile, dropped 55.74 points, or 3.33 percent, lower at 1,618.26. All industry categories lost ground, with marine transportation, metal product and securities house-linked issues comprising those that declined the most by the close of play.
The market was closed for the national holiday
Markets were closed on Monday for a national holiday. The slump followed a global stock market plunge on Monday, which saw big drops in the US and Europe, the BBC reported. Shares in Toyota Motor Corp fell 3.7 percent, while Uniqlo's parent company Fast Retailing dropped 4.2 percent. Both firms are highly dependent on a global supply chain that faces disruption following the shutdown of Chinese factories.
Overnight, Wall Street saw its sharpest daily declines since 2018, with the Dow Jones falling 3.5 percent, the BBC reported. Shares across Asia's other major stock markets traded cautiously on Tuesday. Hong Kong's Hang Seng index edged up slightly, while South Korea's Kospi rose 1.2 percent.
Many analysts expect the spread of the coronavirus to peak in the first quarter of this year, with economic activity rebounding in the second quarter. "Those who expect the virus to kick off a global recession might be disappointed, as the impact is likely to be temporary," said Margaret Yang, an analyst with CMC Markets.
"Central banks around the globe are ready to inject liquidity and cut down interest rates to cushion the headwind." She added that the coronavirus is proving to be less deadly than SARS, just more contagious. In China, the Shanghai Composite index closed down 0.6 percent amid mixed reports about efforts to contain the virus. Investors remain worried about how far the coronavirus will spread rapidly outside of China, with raised fears of a prolonged global economic slowdown.