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March 19 (Reuters) - Japan's share benchmark Nikkei fell to
a 3-1/2-year low on Thursday, reversing early gains as panic
selling over the coronavirus pandemic overshadowed a massive
shot of stimulus from the world's major central banks.
The Nikkei average .N225 rose as much as 2.6% at one point
but closed down 1.04% at 16,552.83, its lowest close since
November 2016. It has fallen about 30% in the past four weeks.
The Nikkei's volatility index .JNIV , a measure of
investors' volatility expectations based on option pricing and
considered to be a fear gauge, rose 4.2% to 58.45, not far from
Monday's nine-year peak of 60.86.
Traders said it appeared some global investors have rushed
to liquidate their holdings for fear of potential market
closures due to the virus crisis.
"A series of steps the world's central banks have quickly
taken have so far been ineffective in turning around investor
sentiment," said Masanari Takada, cross-asset strategist at
Nomura Securities.
The Nikkei's SoftBank Group Corp 9984.T tumbled 17.2% and
was the heaviest-traded individual share on the main board,
hammered by investor scepticism over the outlook for tech bets,
such as office sharing firm WeWork and ridehailer Uber UBER.N .
The tech conglomerate's shares lost 10.9% on Wednesday to
take its market cap below that of mobile phone unit SoftBank
Corp 9434.T for the first time. The most notable mover was the TSE REIT index .TREIT ,
which nosedived 16.8%, its largest ever one-day percentage
drop, to hit a seven-year trough of 1169.96.
Some analysts attributed the plunge to selling by leveraged
investors, while others put the fall down to selling by regional
banks' selling ahead of the fiscal year-end on March 31.
The broader Topix .TOPX continued to outperform the
Nikkei, finishing up 0.97% at 1,283.22. But it also gave up
gains from earlier in the session, having risen more than 3%
after the ECB unveiled its 750 billion euro ($820 billion)
asset-purchase programme. Market players said hopes the Bank of Japan and public
pension funds such as the Government Pension Investment fund
would step in to bolster share prices had helped support the
market.
The dollar rose versus the yen JPY=EBS to a three-week
high, also providing a tailwind for the broader market. A weaker
yen boosts corporate profits when they are repatriated. USD/
Unizo Holdings 3258.T soared 11.8% as the hotel chain said
top shareholders Elliott Management and Ichigo Asset Management
have agreed to tender their shares to Lone Star after the U.S.
fund raised its bid to 6,000 yen per share. Elsewhere, Fujifilm Holdings Corp 4901.T shed 8.5% after
it said it expects no direct earnings impact from potential
sales growth of Favipiravir in China for now as its license for
the key ingredient in the country already expired last year.
On Wednesday, Fujifilm's shares surged by a daily limit of
15.4% after a Chinese official said an active ingredient of the
company's Avigan anti-flu drug appeared to help coronavirus
patients recover.
The turnover at the Tokyo Stock Exchange's main board hit
4.685 trillion yen ($43 billion) .VM1.T , the second highest
this year after last Friday.
($1 = 0.9149 euros)
($1 = 109.0500 yen)