Japanese Shares Close 2% Lower on Omicron, China Rate Cut

Japanese stocks closed sharply lower on Monday after China’s cut in its lending rate failed to lift investor sentiment while the spread of the mutated omicron from the coronavirus continues to raise fears of an economic slowdown around the world.

The Nikkei average fell 2.13 percent to close at 27,937.81 points, its biggest percentage loss since November 26. The broader Topix index fell 2.17 percent to 1,941.33 points.

China cut its benchmark lending rate for the first time in 20 months in a bid to support growth as the economy slows.

Concerns about the effect of the Omicron mutant have also dampened risk appetite. The Netherlands imposed a general closure on Sunday, at a time when other European countries faced the possibility of imposing more Covid-19 restrictions before the Christmas and New Year holidays.

All 33 sector sub-indices fell on the Tokyo Stock Exchange, with brokerages leading the decline.

The online financial group SBI fell 6.7 percent, with a group of active investors selling their entire stake in Shinsei Bank to the group that now controls the bank.

Shares of Shinsei Bank fell 8.36 percent, while shares of Nomura Holdings fell 5.96 percent and Daiwa Securities fell 4.49 percent.