Japanese shares tumble after chip plant fire, car makers hit

  • Reuters
  • Stock Market News
Japanese shares tumble after chip plant fire, car makers hit
Credit: © Reuters.

TOKYO, March 22 (Reuters) - Japanese shares tumbled on Monday as car makers took a hit after a fire at a plant owned by semiconductor supplier Renesas Electronics 6723.T fanned worries about more chip supply shortfalls hitting vehicle production.

The Nikkei continued to underperform the broader market, after the Bank of Japan said on Friday it would no longer purchase Nikkei-linked exchange traded funds (ETFs).

The Nikkei share average .N225 fell 2.07% to close at 29,174.15, its biggest decline since March 4.

The broader Topix .TOPX ended its eight-day winning streak, falling 1.09% to close at 1,990.18.

Renesas dropped as much as 4.89% after the key automotive semiconductor supplier said production at its fire-damaged plant will take at least a month to restart, and carmakers will start to feel a supply pinch in about a month. transport equipment index .ITEQP.T was the biggest drag in the market, followed by the insurance sector .IINSU.T .

Honda Motor 7267.T dropped 3.63% while Nissan Motor 7201.T lost 3.7%. Car parts maker Denso 6902.T shed 4.94% and Toyota Motor 7203.T fell 3.26%.

The shares that have big weightings in the Nikkei average continued to reel from the Bank of Japan's decision to buy only Topix-linked ETFs.

Fast Retailing 9983.T dropped 4.54% while Daikin 6367.T fell 4.02%.

"Today we have had a confluence of negative factors such as a fire at Renesas factory and the market confusion after the BOJ's move. But fundamentally, the market is likely going through a correction on worries about rising U.S. bond yields," said Shinichi Ichikawa, senior fellow at Pictet Asset Management.

Tokio Marine 8766.T fell 5.55% on worries about its exposure to collapsed British supply chain finance firm, through its subsidiary in Australia.

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