Nikkei index declines on the back of the Iranian attack and the selling on Wall Street

Japan’s Nikkei blue-chip index fell on Monday as investors rushed to sell stocks after escalating violence in the Middle East and a sell-off on Wall Street at the end of the week.

Shares of the Japanese semiconductor sector followed their American counterparts in decline after a media report stated that China had ordered the country’s largest telecommunications companies to gradually stop using foreign chips.

The Nikkei index fell 0.74 percent to close at 39,232.80 points, but it recovered some early losses that led to a decline of 1.78 percent.

The broader Topix index also fell 0.23 percent.

Morale, which fell after major Wall Street indexes lost more than 1 percent on Friday, deteriorated after Iran launched an unprecedented attack on Israel at the weekend.

“Risk aversion is already putting pressure on Japanese stocks,” said Kazuo Kamitani, equity strategist at Nomura Securities.

The stock of Astellas Pharmaceuticals topped the Nikkei Index’s losses, as the stock fell approximately eight percent, pushing the pharmaceutical sector index to decline 1.86 percent to the bottom of the 33 sub-indices on the Tokyo Stock Exchange.

Takashimaya stock was the second largest loser on the Nikkei index, falling 6.66 percent.

Laser Tech, a manufacturer of semiconductor testing machines, led the chip sector’s losses, falling 2.59 percent. The company’s largest competitor, Advantest, also fell 1.31 percent.

The indices of shipping companies and oil companies rose amid escalating tensions in the Middle East, by 2.41 percent and 1.02 percent, respectively.

As for the utility sector index, it led gains and rose 3.11 percent, supported by the Tokyo Electric Power Company stock, which jumped 5.83 percent amid new steps towards resuming operations at the Kashiwazaki-Kariwa plant, the largest nuclear plant in the world.