Japanese shares slide on global growth worries

Japanese shares slipped to one-month lows on Tuesday with investors selling cyclical shares as concerns over European politics added to the list of reasons to be cautious about the global economic outlook.

The Topix fell as much as 0.7 per cent to as low as 1,758.84, its lowest level since late April. The Nikkei average dropped 0.7 per cent to 22,324, reports Reuters.

Steel companies and shippers — the sectors that have been pummelled most by worries about US trade policies — led the losses, falling 1.7 per cent and 1.3 per cent, respectively.

Rising US interest rates are likely to gradually squeeze borrowers. Market players think that is already becoming a reality for weak spots in emerging economies, such as Argentine and Turkey.

In addition, the yen has bounced back to around 109 per dollar from its four-month low of 111.395 touched last week, threatening the outlook for Japanese exporters.

Decliners outnumbered gainers by about 5-1.

Nippon Paper Industries tumbled 7.6 per cent after it said on Monday it saw a net loss of 18 billion yen ($165.11 million) in the current financial year, due to impairment loss as paper demand continued to decline on digitalisation.

Among the Tokyo Stock Exchange’s 33 sector indexes, the paper and pulp company sub index was the worst performer, falling 2.3 per cent.

Japan Display fell as much as 21 per cent on worries about revenue losses after South Korea’s Electronic Times reported that Apple Inc had decided to use OLED screens for all new iPhone models for next year.

Tokai Carbon rose 7.0 per cent, hitting record highs after it raised the annual profit guidance by 47 per cent.

The firm has benefited from a rise in the prices of graphite electrodes, one of its main products and its shares were among the best performers since last year.