Japanese stocks fall on recession fears after COVID-19 cases surge

Japanese stocks fell on Tuesday as a surge in domestic COVID-19 infections sparked fears of a recession and led to a morning sell-off.

The Nikkei index closed down 1.77 percent at 2,6336.66 points, after losing as much as 1.99 percent earlier in the session. The broader Topix index fell 1.64%.

Japanese stocks rose on Monday, outperforming the rest of the region, after Japan’s ruling coalition scored a strong result in the House of Councilors elections, the upper house of parliament, at the start of the week.

The Nikkei is down 2.68 percent from Monday’s high of 27,062.17 and down 0.68 percent from Friday’s close, when markets were shaken by the shooting of former Prime Minister Shinzo Abe.

Japan recorded 54,993 cases of the Coronavirus on Monday, according to official government data, up from 16,791 cases in the previous week.

Technology and industrial stocks had an impact on the Nikkei, with electronic component maker TDK being the biggest loser, dropping 5.14 percent.

Every sector on the Nikkei fell, with the smallest losses being the share of utility companies, which fell by 0.07 percent.

The best performer was the food products company and its share price rose 2.74 percent.

Video game companies Konami and Nintendo also rose 0.67 percent and 0.42 percent, respectively.