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Japan's Nikkei sinks as China COVID worries weigh; tech shares slide

11/27/2022 | 10:17pm EST

TOKYO, Nov 28 (Reuters) - Japan's Nikkei share average slid for a second day on Monday, as protests in China over renewed COVID-19 clampdowns hurt investor sentiment, while tech stocks fell in line with Wall Street peers.

The Nikkei ended the morning session down 0.62% at 28,107.79, extending its 0.35% decline from Friday, as the benchmark index retreated from a more than two-month high of 28,502.29 hit the day before.

Of the Nikkei's 225 components, 191 fell versus 23 that rose and 11 that were flat.

The broader Topix sank 0.79%.

Early declines for Japanese stock indexes accelerated after Chinese equity markets opened sharply lower, with Hong Kong's Hang Seng tumbling as much as 4.2% at one point.

A wave of protests unprecedented under Xi Jinping's rule has swept China, including clashes with police in Shanghai, after the government doubled down on pandemic restrictions amid a surge in COVID cases.

"This news is definitely a negative for Japanese stocks, especially the tech sector, which has large exposure to Chinese markets and supply chains," said Kenji Abe, an equity strategist at Daiwa.

"A slowdown in the Chinese economy will have a big impact on the Japanese stock market."

Tech stocks were already under pressure after a slump in Apple on Friday following a report that COVID restrictions would further cut output at its flagship iPhone factory in China. The Philadelphia SE Semiconductor Index also sagged 1.26%.

Chipmaking equipment makers Tokyo Electron and Advantest dropped 1.56% and 0.64% respectively.

Startup investor SoftBank Group - which is heavily invested in Chinese tech companies, including Alibaba and Didi - slid 0.71%.

Nintendo and Sony slumped 1.39% and 0.56%, feeling an additional weight as a stronger yen cut the outlook for overseas revenue.

Toyota and Honda fell 1.07% and 0.92%, respectively.

Uniqlo store operator Fast Retailing, which has a large network of Chinese outlets, lost 0.63%. (Reporting by Kevin Buckland; editing by Uttaresh.V)


ę Reuters 2022
Stocks mentioned in the article
ChangeLast1st jan.
ADVANTEST CORPORATION -2.02% 9710 Delayed Quote.16.86%
ALIBABA GROUP HOLDING LIMITED -3.11% 106.33 Delayed Quote.20.71%
APPLE INC. 2.44% 154.5 Delayed Quote.18.91%
DIDI GLOBAL INC. -3.70% 4.42 Delayed Quote.38.99%
FAST RETAILING CO., LTD. 2.95% 82990 Delayed Quote.0.10%
HONDA MOTOR CO., LTD. 1.88% 3258 Delayed Quote.5.47%
NIKKEI 225 0.67% 27693.65 Real-time Quote.5.42%
NINTENDO CO., LTD. -0.02% 5621 Delayed Quote.1.63%
SOFTBANK GROUP CORP. 0.06% 6332 Delayed Quote.12.12%
SONY GROUP CORPORATION -1.52% 12015 Delayed Quote.21.57%
TOKYO ELECTRON LTD. -1.96% 46570 Delayed Quote.22.17%
TOPIX INDEX 0.45% 1979.22 Delayed Quote.4.15%
TOYOTA INDUSTRIES CORPORATION -4.65% 7380 Delayed Quote.6.91%
TOYOTA MOTOR CORPORATION 1.16% 1913.5 Delayed Quote.4.36%
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