Japan stocks slide amid growth fears; techs track U.S. counterparts

Published 2019/01/04, 04:17
Updated 2019/01/04, 04:20
© Reuters.  Japan stocks slide amid growth fears; techs track U.S. counterparts
USD/JPY
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JP225
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AAPL
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TOPX
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6301
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7267
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7270
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4911
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5108
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6762
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6770
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6954
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6988
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6981
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SPLRCT
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* Nikkei down 3.09 pct, Topix loses 2.32 pct

* Japan markets reopen in 2019 to string of bearish drivers

* Downbeat U.S. and China data add to growth woes

By Shinichi Saoshiro

TOKYO, Jan 4 (Reuters) - Japanese shares fell sharply on Friday, bruised on the first trading session of the year as Apple (NASDAQ:AAPL) Inc's earnings warning hit technology stocks and broader sentiment soured on signs of slowdowns in the U.S. and Chinese economies.

The Nikkei share average .N225 was down 3.09 percent at 19,397.01 after losing as much as 3.86 percent, as investors digested bearish news since the start of the year.

Japanese markets opened for the first time in 2019 on Friday after being shut for the new year holidays.

The broader Topix .TOPX shed 2.32 percent to 1,459.49.

"Market instability has extended into the new year, as concerns towards the U.S. and Chinese economies have increased in the wake of weak manufacturing data from these countries," said Masahiro Ichikawa, senior strategist at Sumitomo Mitsui Asset Management.

"Furthermore, the markets have even begun pricing in the possibility of Fed cutting interest rates. We could see a big reaction if the U.S. non-farm jobs report proves to be weak."

Wednesday's China Caixin/Markit Manufacturing Purchasing Managers' Index (PMI) marked the first contraction since May 2017 and Thursday's Institute for Supply Management (ISM) data showed U.S. factory activity in December suffer the biggest drop since October 2008. on Wednesday took the rare step of cutting its quarterly sales forecast, blaming slowing iPhone sales in China. technology shares tracked their U.S. peers lower. S&P Technology companies .SPLRCT had slid 5.1 percent on Thursday, its biggest one-day percentage drop since August 2011, after Apple's revenue warning sent shockwaves through the sector. Manufacturing Co 6981.T lost 10.6 percent, Nitto Denko Corp 6988.T fell 5.7 percent, TDK Corporation 6762.T dropped 6.6 percent and Alps Alpine 6770.T was down 6.8 percent.

Exporters retreated following the yen's surge. The Japanese currency was above 110 yen to the dollar a week ago but last traded at 107.58 JPY= .

Honda Motor Co 7267.T lost 1.7 percent, Bridgestone Corp 5108.T declined 2.4 percent and Subaru 7270.T retreated 5.1 percent.

Companies that derive a large portion of their sales in China also slipped. Industrial machinery maker Komatsu Ltd 6301.T fell 3.9 percent, robot manufacturer Fanuc Ltd 6954.T dropped 5.9 percent and cosmetics company Shiseido Co 4911.T shed 7.1 percent.

Of the Tokyo Stock Exchange's 33 subsectors, all but two were in the red.

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