Wednesday, 08 July 2015 11:58
TOKYO: Tokyo stocks tumbled 3.14 percent Wednesday as a rout in Chinese equities hammered sentiment and added to losses fuelled by worries over Greece’s future in the eurozone.
The Nikkei 225 index at the Tokyo Stock Exchange dropped 638.95 points to close at 19,737.64, the first time it has fallen below the psychologically important 20,000 level in several weeks.
The broader Topix index of all first-section shares dived 3.34 percent, or 54.75 points, to 1,582.48.
Tokyo opened in the red on concerns about Greece as it faces another deadline to reach an agreement on its debt, and the losses piled up in the afternoon as the plunge in Chinese markets had a ripple effect on regional markets.
Shanghai dropped nearly seven percent at the open despite government moves to shore up markets, which have plunged more than 30 percent since mid-June, and investors are now worried about the spill-over effect on the already slowing Chinese economy.
Bloomberg News reported that to prevent further losses, trading has been suspended in more than 1,200 mainland firms, representing 43 percent of those listed.
The losses also spread to Hong Kong, which sank almost five percent at one point in the morning, while US-listed Chinese firms tumbled despite a pick-up across Wall Street’s three main indexes.
Japan is a major trading partner with China and many firms with links to the mainland market saw their shares tumbled from Tuesday’s close.
“Today we’re starting to see Japan being dragged down and people worry about how the Chinese economy would affect Japan,” said Alex Wong, asset-management director at Ample Capital.
“Gradually this will drag other markets lower because the magnitude of a China crisis would be far bigger than anything happening in Greece.”
