Tokyo stocks open down over 3pc on virus fears, oil prices

A passerby wearing a protective face mask walks past an electronic board showing the graphs of the recent movements of Japan's Nikkei share average outside a brokerage in Tokyo March 6, 2020. — Reuters pic
A passerby wearing a protective face mask walks past an electronic board showing the graphs of the recent movements of Japan's Nikkei share average outside a brokerage in Tokyo March 6, 2020. — Reuters pic

TOKYO, March 9 — Tokyo stocks opened down more than 3 per cent on Monday on fears over the new coronavirus and a plunge in oil prices that sent the dollar down against the yen.

The benchmark Nikkei 225 index dropped 3.41  per cent or 707.92 points to 20,041.83 in early trade, while the broader Topix index was down 3.24  per cent or 47.63 points at 1,423.83.

The Nikkei continued to sink, down around 4.3  per cent by 1230 GMT.

“The yen surged... at the market open this week as investors dove into safe havens on accelerating Covid-19 cases in Europe, and as Saudi Arabia triggers a price war for oil, adding another level of unwanted panic to a market already thick with fear,” Stephen Innes, chief market strategist at AxiCo, said in a note. 

Concurring with Innes, Marito Ueda, senior trader at FX Prime, told AFP: “Fears over the virus’s impact on the global economy and plummeting in the US yields had investors seek the safe haven yen.”

“It is essentially flight from the dollar,” he added.

The dollar fetched ¥104.01 in early Tokyo time, after dipping to around ¥103.83 in Sydney time, the lowest level since November 2016. That compares with ¥105.40 in New York late Friday.

The plunges came after Saudi Arabia slashed oil prices in response to a failure by Opec and its allies to clinch a deal on production cuts — a move characterised by some analysts as an all-out war.

The ASX 200 was down 5.4 per cent in early trade, with energy firms Oil Search and Santos down 25  per cent each.

“Tokyo shares are seen dropping amid risk-off sentiment in the global financial market,” Mizuho Securities said in a commentary.

In Tokyo, exporters were particularly lower, with Nissan down 5.80 per cent at ¥399.5, Toyota down 3.90 per cent at ¥6,529 and Sony down 4.80 per cent at 6,382.

Banks also plunged, with Sumitomo Mitsui Financial trading down 4.80 per cent at 4.21 per cent at Mitsubishi UFJ Financial down 5.00 per cent at ¥462.9.

On Wall Street, the Dow ended down 1.0 per cent at 25,864.78. — AFP

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