Tokyo stocks’ Nikkei index plunges 2% on new COVID-19 variant concerns
Written by tokyoclub on November 26, 2021
Tokyo stocks plunged Friday morning, with the Nikkei falling over 2 percent to its lowest intraday level in nearly a month, as reports of a new COVID-19 variant raised concerns over its potential effect on the global economic recovery.
The 225-issue Nikkei Stock Average plummeted 719.65 points, or 2.44 percent, from Thursday to 28,779.63. The broader Topix index of all First Section issues on the Tokyo Stock Exchange was down 38.22 points, or 1.89 percent, at 1,987.47.
A financial board in Tokyo shows the Nikkei stock index falling below the 29,000 mark on Nov. 26, 2021. (Kyodo)
Every industry category lost ground, led by air transportation, marine transportation, and nonferrous metal issues.
The U.S. dollar fell to the upper 114 yen range as the yen, seen as a safe-haven asset, was sought on worries over the new COVID-19 strain discovered in South Africa, dealers said.
At noon, the dollar fetched 114.69-70 yen compared with 115.35-45 yen in London at 4 p.m. and 115.38-39 yen in Tokyo at 5 p.m. Thursday. U.S. financial markets were closed Thursday for the Thanksgiving holiday.
The euro was quoted at $1.1224-1224 and 128.72-73 yen against $1.1205-1215 and 129.30-35 yen in London and $1.1215-1216 and 129.40-44 yen in Tokyo late Thursday afternoon.
Stocks were lower from the outset, extending losses throughout the morning with the Nikkei index falling below the 29,000 mark for the first time since Oct. 29, as a stronger yen and drop in U.S. stock futures additionally pressured the market.
“The discovery of a new coronavirus strain served as a negative blow to the market, especially as Europe has been battling a recent surge in cases,” said Koichi Fujishiro, a senior economist at Dai-ichi Life Research Institute.
It is feared the variant confirmed in South Africa may be highly contagious and the efficacy of COVID-19 vaccines against the variant is being questioned due to the nature of its mutations.
On the First Section, declining issues outnumbered advancers 1,976 to 161, while 43 ended the morning unchanged.
Air transportation issues were particularly hit on worries that the South African variant may reduce people’s ability to travel.
ANA Holdings plummeted 99.0 yen, or 4.0 percent, to 2,373.5 yen, and Japan Airlines tumbled 105 yen, or 4.6 percent, to 2,178 yen.
Export-oriented shares were lower as the yen strengthened against the U.S. dollar. Electronic manufacturers Canon fell 51.0 yen, or 1.9 percent, to 2,594.0 yen, and Panasonic slumped 35.5 yen, or 2.6 percent, to 1,318.5 yen.
Automakers Mazda Motor dropped 30 yen, or 2.9 percent, to 1,020 yen, and Nissan Motor sagged 13.2 yen, or 2.1 percent, to 626.1 yen.