Nikkei Index Drops After Nasdaq Turmoil

The Japanese Nikkei Index fell on Monday, September 7th, after Wall Street fell, while SoftBank Group shares tumbled on reports that it had made big bets on US technology stocks as the sector’s rally dissipated.

The Nikkei index fell by 0.5% to close at 2,3089.95 points, while the broader TOPIX index fell 0.42% to 1609.74 points, as the two indices fell further from their six-month high that they touched on Thursday.

Concerns about rising valuations have pushed the Nasdaq index, teeming with technology companies on Wall Street, to fall sharply over the past two sessions, in the biggest setback after strong gains that lasted nearly six months.

In Japan, the share of SoftBank Group tumbled 7.2% to its lowest level in two months, its biggest drop since late March.

Informed sources said on Friday that the company had made large purchases of options contracts during the rally in the US stock market in the past few weeks as a way to temporarily invest part of the proceeds from the sale of assets.

Bank shares rose 0.2%, as Aomori Bank rose 8.5% and Michinoku Bank 8.9% after local media reported that the two banks, based in northern Japan, were discussing business integration.

Although the two banks said no decision had been taken yet, the news fueled hopes of further consolidations in Japan’s crowded banking sector.