Nikkei slides to 1-month low as inflation fear hit growth stocks

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TOKYO, Oct 5 (Businesshala) – Japanese shares tumbled to a one-month low on Tuesday as oil prices rose further, raising concerns about inflation and monetary tightening around the world.

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The Nikkei stock average fell 2.97% to 27,602.33, down from 27,865, its 76.4% retracement from late August to September, with the next support at 26,954, this August 20. is less.

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The broader Topix fell 1.79% to 1,938.66, to enter its seventh consecutive losing season and its lowest level since August 27.

“It looks like investor sentiment that inflation will be temporary and earnings will continue to improve may decline,” said Masayuki Doshida, senior market analyst at Rakuten Securities.

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Some market players said new Japanese Prime Minister Fumio Kishida’s proposal to raise taxes on capital gains also weakened sentiment.

Growth stocks that benefited from lower interest rates sharply underperformed, with the Topix Growth Index falling 2.0%, while the Topix Value declined 0.7%.

Fast Retailing fell 6.9% in September after the operator of the Uniqlo casual clothing chain saw its existing store sales drop 19.1%.

Internet firm Z Holdings declined 6.8%, while electronic parts maker Murata Manufacturing declined 4.1%.

SoftBank Group lost 5.1% on concerns about the falling values ​​of its investments in tech firms, particularly Alibaba, which has fallen more than 50% from a record peak hit nearly a year ago.

Semiconductor-related stocks also suffered with MSCI’s Japan Semi-conductor Index falling 4.7%.

Leading the trend were oil companies, which benefited from rising crude oil prices.

Oil exploration company Impex rose 5.5% while Idemitsu Kosan was up 2.3%.

Life insurers also benefited from higher US bond yields, with T&D Holdings gaining 1.1% and Dai-ichi Life Holdings up 0.9%.

Reporting by Hideyuki Sano; Editing by Krishna Chandra Elurik

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