The Japanese stock market experienced a notable decline on Tuesday, erasing the gains made in the past two trading sessions. The Nikkei 225 Index dropped slightly below the 38,300 mark, despite generally positive signals from Wall Street's overnight performance. This downturn was primarily driven by weakness in sectors like technology and financial stocks, including the index's major players.
By mid-session, the Nikkei 225 had lost 483.32 points or 1.25%, settling at 38,296.82, after reaching a low of 38,020.08 earlier in the trading day. This is a stark contrast to the sharp increase seen on Monday.
Key stocks like SoftBank Group saw a reduction of over 1%, and Fast Retailing, the company behind Uniqlo, marginally decreased by 0.3%. In the automotive sector, Honda and Toyota both saw declines exceeding 1%.
The technology sector was hit hard, with Advantest dropping nearly 5%, Screen Holdings over 2%, and Tokyo Electron slipping almost 3%. Within the banking industry, Mitsubishi UFJ Financial decreased by 1.5%, Mizuho Financial fell by more than 1%, and Sumitomo Mitsui Financial saw a decline of over 2%.
Exports from major companies were mostly lower; Panasonic decreased nearly 2%, Mitsubishi Electric lost almost 3%, Canon slipped nearly 1%, and Sony edged down by 0.4%.
Among the most significant decliners, Fujikura plunged by more than 6%, Lasertec fell over 5%, and Furukawa Electric, along with Mercari, saw declines approaching 5%. Companies such as Kawasaki Heavy Industries, Sumco, Mitsubishi Motors, Nissan Motor, IHI, and Disco were down more than 4% each. Additionally, Hitachi and Mitsubishi Heavy Industries fell close to 4%, while Mitsubishi and NTT Data Group slid over 3%.
Conversely, some stocks bucked the downward trend: Haseko, ZOZO, Kao, Toray Industries, Keisei Electric Railway, and Sapporo Holdings each gained around 3%.
In economic developments, Japan's producer prices rose by 2.9% year-on-year in October, according to the Bank of Japan on Tuesday. This was an increase from the revised 2.8% in September (initially reported as 2.6%) and surpassed expectations of a 2.5% rise. On a month-to-month basis, producer prices jumped 0.8% following a 0.1% dip in the previous month. Excluding international transportation, the annual increase in producer prices was 3.1%, with a monthly rise of 0.8%.
In the currency arena, the U.S. dollar was trading within the lower 154 yen range on Tuesday.
Reflecting on Wall Street, stocks receded slightly during Monday's session but managed to close mostly higher after an initial surge. Despite retreating from peak levels during the day, the Dow ended with a new record high.
The Dow climbed for the fourth straight day, rising 440.06 points or 1.0% to close at 44,736.57. The S&P 500 continued its winning streak to six sessions, adding 18.03 points or 0.3% to close at 5,987.37, while the Nasdaq increased by 51.18 points or 0.3% to end at 19,054.84.
European markets also reported gains: the French CAC 40 Index finished marginally above the unchanged line, while both the UK’s FTSE 100 Index and Germany’s DAX Index climbed by 0.4%.
Crude oil prices saw a significant drop on Monday, driven by expectations that Israel and Hezbollah might soon finalize a cease-fire agreement. In response, West Texas Intermediate crude oil futures for January delivery fell by $2.30 or 3.2%, closing at $68.94 per barrel.
