Japanese shares track Wall Steet losses; banks, carmakers come under pressure

SYDNEY, April 16 (Reuters) - Japanese shares dropped on
Thursday, tracking the overnight decline on Wall Street as dire
economic outlook weighed on investor sentiment, with banks and
automakers leading the falls.
The benchmark Nikkei average .N225 dropped 1.2% to
19,315.45 by the midday break. The Nikkei's volatility index
.JNIV , a measure of investors' volatility expectations based
on option pricing and considered to be a fear gauge, rose 6.5%
to 38.62.
On Wednesday, all three major U.S. stock indexes fell as the
raft of weak economic data and dismal first-quarter earnings
reports compounded concerns over the extent of damage from the
coronavirus outbreak. .N
In further evidence of economic damage from the epidemic,
U.S. retail sales fell the most on record last month, while
manufacturing output fell by the most in 74 years, raising fears
of a deep recession. Disappointing earnings from Bank of America Corp BAC.N and
Citigroup added the worries about prospects for the
rest of the U.S. corporate reporting period.
Taking a cue from this, Tokyo-listed banks came under
pressure on Thursday, with Mitsubishi UFJ Financial Group (MUFG)
Inc 8306.T , Sumitomo Mitsui Financial Group (SMFG) Inc
8316.T and Mizuho Financial Group Inc 8411.T shedding
between 2.3% and 3.2%.
The broader Topix .TOPX dropped 1.0% to 1,420.12 by the
recess, with more than two-thirds of the 33 sector sub-indexes
on the Tokyo exchange trading in negative territory.
Highly cyclical transport equipment .ITEQP.T , non-ferrous
metals .INFRO.T and sea transport .ISHIP.T were the worst
three performing sectors on the main bourse.
Toyota Motor Corp 7203.T slid 2.2% after the carmaker said
it will cut production of finished vehicles at 18 plants in
Japan due to the COVID-19 outbreak. Other automakers also faced selling pressure, with Nissan
Motor Co Ltd 7201.T , Honda Motor Co Ltd 7267.T and Mazda
Motor Corp 7261.T losing between 3.3% and 4.1%.
Bucking the overall weakness, the index of Mothers start-up
shares .MTHR advanced 1.7% to 723.94, its highest level since
March 6.