TOKYO, Feb 26 (Reuters) - Japanese shares extended losses on
Wednesday to their lowest close in more than four months, as a
spike in coronavirus infections beyond mainland China threatened
to damage global economic growth, forcing investors to dump risk
assets.
The benchmark Nikkei average .N225 lost 0.79% to
22,426.19, its lowest close since Oct. 15, 2019 though the index
pared most of its early losses to end above a major support
level of 200-day moving average at 22,196.
"The market was supported a bit by bargain-hunting. But
cheap valuations alone would not be enough for buying. The
market will be capped unless we see positive headlines on
coronavirus," said Masahiro Ichikawa, senior strategist at
Sumitomo Mitsui DS Asset Management.
Positive news on the virus was in short supply, with both
China and South Korea reporting 500 new cases, while there are
signs of fresh outbreak in other countries such as Thailand and
Bahrain. Adding to the fears was an alert from the U.S. Centers for
Disease Control and Prevention on Tuesday warning Americans to
prepare for the spread of coronavirus in the United States,
signalling a change in tone for the Atlanta-based U.S. health
agency. The broader Topix .TOPX lost 0.75% to 1,708.89 in active
trade, with turnover hitting more than 3 trillion yen for two
sessions in a row.
All of the 33 sector sub-indexes on the Tokyo Stock Exchange
were trading lower, with mining .IMING.T , real estate
.IRLTY.T and services .ISVCS.T being the worst three
performers.
Mitsubishi Estate Co Ltd 8802.T closed 2.8% lower after
Bloomberg News reported a person infected with the new
coronavirus had been at Shin Marunouchi Building, one of the
landmark buildings that the company developed in Tokyo's premier
business district.
The virus has also hit some Olympics-related stocks on
mounting worries it could lead to cancellation of the 2020
Summer Games scheduled to start in Tokyo in July.
Dentsu Group Inc 4325.T dropped 0.7%, sliding for a sixth
day to a seven-year low, amid concerns the Tokyo Olympics will
be cancelled and hurt Japan's largest ad agency. Other Olympic-related shares also plummeted. Hibino
2469.T , which provides audio and visual services at big
events, closed 7.4% weaker, while sportswear maker Mizuno
8022.T lost 2.4% to a one-year low.
Event organising service firms were battered after Prime
Minister Shinzo Abe called for sports and cultural events to be
scrapped or curtailed for two weeks.
TKP 3479.T lost 3.9%, while Hakuten 2173.T ended down
6.4%.
The Nikkei's volatility index .JNIV , a measure of
investors' volatility expectations based on option pricing,
spiked to as high as 29.74, its highest level in 14 months.