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Nikkei drops to two-week low as China virus spreads; cyclicals lose ground

Published 23/01/2020, 07:40
© Reuters.  Nikkei drops to two-week low as China virus spreads; cyclicals lose ground
USD/JPY
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JP225
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TER
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TOPX
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6857
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6146
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6594
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4755
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IMING.T
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IPETE.T
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ISHIP.T
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TOKYO, Jan 23 (Reuters) - Japanese shares skidded to

two-week lows on Thursday, led by commodity-related and other

cyclical stocks, as heightened anxiety about the spread of a new

coronavirus in China sapped confidence.

Investors were also wary ahead of corporate earnings,

pushing the Nikkei share average .N225 down 1.0% to 23,795.44,

its lowest closing level since Jan. 10. The broader Topix

.TOPX fell 0.8% to 1,730.50.

A broad range of shares fell, with all but two of the Tokyo

Stock Exchange's 33 industry subindexes in negative territory.

Traders said a sharp slide in commodity prices, partly due

to worries about China's virus outbreak, weighed on

commodity-related and other cyclical stocks. O/R MET/L

Deaths from China's new coronavirus rose to 17 on Wednesday,

with nearly 600 cases confirmed. The outbreak has evoked

memories of Severe Acute Respiratory Syndrome (SARS) in

2002-2003, another coronavirus which broke out in China and

killed nearly 800 people in a global pandemic. A potentially rapid spread of the virus, as millions of

Chinese travel domestically and abroad during the week-long

Lunar New Year holidays which start on Friday, kept global

health authorities and investors on edge.

Among the Tokyo bourse's subsectors, sea transport

.ISHIP.T , oil and coal products .IPETE.T and mining

.IMING.T were the worst performing subindexes, declining by

2.6%, 2.2% and 2.0%, respectively.

The Japanese yen JPY= firmed to a 1-1/2-week high of

109.53 yen versus the dollar as investors sought safety, though

it also served as a headwind for exporter stocks.

Bucking the overall weak trend, semiconductor automated test

equipment (ATE) maker Advantest 6857.T climbed 2.5% to its

highest in 13 years, after its U.S. competitor Teradyne's

TER.O fourth quarter earnings beat estimates. In Japan, Nidec Corp 6594.T and Disco Corp 6146.T are

due to announce their financial results for the October-December

quarter after the market close on Thursday.

Elsewhere, Rakuten Inc 4755.T lost 3.8% after media

reported Japan's antitrust regulator will launch an

investigation into the e-commerce giant over its free-shipping

policy of the company's online shopping mall.

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