Tokyo stocks tumble almost 4% as Hong Kong, Shanghai slump

Tokyo’s benchmark index dived nearly 4.0 percent to close at a fresh six-month low Tuesday, erasing a morning rebound as Hong Kong and Shanghai extended losses on worries over China’s stalling growth.

In wild trading, the Nikkei 225 at the Tokyo Stock exchange ended 733.98 points lower at 17,806.70 — its sixth-straight losing session and the lowest finish since mid-February — after briefly clawing back into positive territory by the midday break.

The broader Topix index of all first-section shares also swung between positive and negative territory, ending down 3.26 percent, or 48.22 points, at 1,432.65.

The Nikkei had plunged more than 4.0 percent at open, before pushing back into the black in mid-morning, then collapsing in afternoon deals after top Japanese officials called for calm in the market.

The index has lost 13 percent over the past six sessions, as markets around plunge on the uncertain outlook for China, a key driver of global growth now seen as a major threat to the world economy.

In afternoon trading, Shanghai was down 6.70 percent while Hong Kong was off 0.67 percent.

“The Japanese government has been one of the most outspoken in their concerns over China’s recent moves,” said IG Markets’ chief market strategist Chris Weston.

“China needs to convince the domestic market and the world that its economy is able to cope with further outflows and that its slowdown is under control.”

Earlier, Tokyo won support from a weakening yen, which is a plus for major exporters such as Sony and Toyota.

The dollar bought 119.17 yen in late afternoon trading, up from 118.51 yen in New York where it fell at one stage to 116.18 yen, its lowest level since February.

source:AFP