Tokyo stocks open lower as investors lock in profits

A relatively higher yen against the dollar is also weighing on the market, analysts said
Last Updated 18 November 2020, 02:51 IST

Tokyo stocks opened lower Wednesday on profit-taking following rallies propelled by coronavirus vaccine developments and an economic pick-up.

The benchmark Nikkei 225 index was down 0.51 per cent or 132.48 points at 25,882.14 in early trade, while the broader Topix index slipped 0.49 per cent or 8.55 points to 1,726.11.

"Even though the basic undercurrent is in the upward direction, a sense of overheating after recent rallies... is prompting position-adjustment (selling) by investors," said Okasan Online Securities chief strategist Yoshihiro Ito.

"Expectations for a coronavirus vaccine will continue... but given recent market rallies before the approval of a vaccine, it's better to prepare for a scenario of 'investors selling massively to lock in profit by the time the vaccine will be available'," he said.

A relatively higher yen against the dollar is also weighing on the market, analysts said. The dollar fetched 104.16 yen in early Asian trade, against 104.17 yen in New York.

In Tokyo, Sony was down 0.83 per cent at 9,330 yen after it said it will split its imaging and sensor sectors.

Automakers and airlines were lower on worries that economic activity may shrink after reports said the Tokyo government may raise its virus alert level and recommend shops close early. Toyota was down 1.59 per cent at 7,321 yen, Honda was off 3.37 per cent at 2966.5 yen, Japan Airlines was down 1.09 per cent at 1,988 yen and its rival ANA Holdings was down 1.89 per cent at 2,601.5 yen.

Japan booked a trade surplus of 872.9 billion yen ($8.4 billion) in October -- the fourth straight monthly surplus -- according to finance ministry data released 10 minutes before the opening bell.

The headline figure, above market expectations of a 300 billion yen surplus, did not prompt any strong market reaction.

On Wall Street, the Dow Jones ended down 0.6 per cent at 29,783.35 as the spike in coronavirus infections undermined tentative optimism about economic recovery.

(Published 18 November 2020, 02:51 IST)

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