Nikkei Index Falls Amidst Covid Fears in China

Japan’s Nikkei fell for the second consecutive session on Monday as protests in China over tough restrictions to combat the coronavirus hurt investor sentiment, while technology stocks fell in line with their Wall Street peers.

The Nikkei index ended the day’s trading down by 0.42 percent, at 28,162.83 points. It had closed down 0.35 percent on Friday, after hitting a two-month high in the previous session.

The broader Topix index fell 0.68 percent.

Japanese stocks’ sales accelerated after the Chinese and Hong Kong stock markets opened sharply lower. However, the Nikkei and Topix indices moved away from their lowest levels, at the end of today’s trading.

China has been gripped by a wave of protests unprecedented under Xi Jinping’s rule, including clashes with police in Shanghai, after the government tightened restrictions imposed to contain a surge in coronavirus cases.

Technology stocks are already under pressure after Apple’s stock fell sharply on Friday following a report that Covid restrictions would cut production at the main iPhone factory in China. The Philadelphia semiconductor index fell 1.26 percent on Friday.

Chipmaking equipment supplier Tokyo Electron and Advantest fell 1.56 percent and 0.54 percent, respectively.

SoftBank Group, which invests heavily in Chinese technology companies including Alibaba and Didi, fell 0.61 percent.

Nintendo and Sony shares fell 0.89 percent and 0.78 percent, respectively, on gains in the yen, which dampened overseas earnings expectations.

Toyota and Honda shares fell 1.05 percent and 0.53 percent, respectively.