Japan’s benchmark Nikkei 225 Stock Average plummeted 4 per cent Tuesday as market sentiment was undermined by concerns about slowing economic growth in China, Japan’s largest trading partner.
The Nikkei lost 714.27 points, or 4.05 per cent, to end at 16,930.84 after falling as much as 4.2 per cent in the afternoon. It was the first time in eight months that the index has closed below 17,000.
The broader Topix index was down 63.15 points, or 4.39 per cent, at 1,375.52.
China said Monday profits of the country’s major industrial companies fell 8.8 per cent year-on-year in August, down sharply from July’s 2.9-per-cent decline.
Export-linked stocks were also hurt by the yen’s rise against major currencies. A stronger yen makes Japanese goods less competitive overseas and erodes repatriated revenues.
In August, Japan’s exports to China shed 4.6 per cent from a year earlier for the first fall in six months to 1.06 trillion yen with shipments of construction machinery down 23.2 per cent.
On Tuesday, shares in Kobe Steel Ltd plunged 11.11 per cent one day after the major manufacturer of construction equipment slashed its full-year net profit forecast by more than half due to China’s slowing economy.
Kobe Steel predicted a net income of 25 billion yen for the current financial year through March 2016, down 58.3 per cent from 60 billion yen it had estimated in July.