Nikkei drops to 1-month low on political tensions, rate-hike worries

Fujikura

22/02/2023 03:00

SINGAPORE, Feb 22 (Reuters) - Japan's Nikkei share
average  .N225  slid to a one-month low on Wednesday under broad
selling pressure piled on by rising global political tensions
and worries that U.S. rate hikes will end up slowing down the
world's economy.
    The Nikkei was down 1.3% by the market lunch break in Tokyo
and will mark its worst performance in about a month if losses
hold. There were just 12 gainers in the index against 211
decliners. The broader Topix  .TOPX  fell 1.1%.
    Bellwether stocks such as job search provider Recruit
Holdings  6098.T  and Uniqlo owner Fast Retailing  9983.T  were
among the biggest drags on the market. 
    Fast Retailing dropped nearly 2%, as weak outlooks from U.S.
retailers Home Depot  HN.N  and Walmart  WMT.N  dented
confidence. Recruit fell 3% to a 2-1/2-year low.
    "It seems to be driven by the declines on Wall Street,
stoked by both yield rises but also geopolitical fears," said
Charu Chanana, a strategist with Saxo Markets in Singapore.
    Market participants, she added, were also nervous ahead of
Japanese inflation data due on Friday and central bank governor
nominee Kazuo Ueda's appearance before parliament on Monday.
    The yen  JPY=EBS  was also under pressure, as was the
Japanese bond market following an unexpected rebound in U.S.
business activity that raised expectations that the Federal
Reserve will further raise interest rates this year.  .N 
    Meanwhile, a survey on Tuesday showed Japan's manufacturing
activity contracted at its fastest pace in 30 months in February
and on Wednesday a Reuters poll showed manufacturers' mood was
gloomy and the service sector sentiment slid for a second month.
   
    Ratcheting up geopolitical tensions, Russian President
Vladimir Putin suspended Russia's last major nuclear arms treaty
with the United States.
    A broker downgrade weighed on insurer T&D Holdings  8795.T ,
which dropped 5.5%. Pharmaceutical firm Daiichi Sankyo  4568.T 
led gainers with a 3.4% rise.
 (Reporting by Tom Westbrook in Singapore
Editing by Vinay Dwivedi)
 ((tom.westbrook@tr.com; +65 6973 8284;))