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Tokyo stocks finish lower following LDP defeat in by-election

2021-10-25 17:06

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TOKYO, Oct. 25 (Xinhua) -- Tokyo stocks finished lower on Monday as the market sentiment was dampened after Japan's ruling Liberal Democratic Party (LDP) lost one of the two by-elections held over the weekend, increasing uncertainties over the outcome in the general election on Oct. 31.

The 225-issue Nikkei Stock Average closed 204.44 points, or 0.71 percent, lower from Friday at 28,600.41.

The broader Topix index of all First Section issues on the Tokyo Stock Exchange ended 6.81 points, or 0.34 percent, lower at 1,995.42.

Trading volume on the main section decreased to 1,045.76 million shares from Friday's 1,051.24 million shares.

Tracking losses on the U.S. Nasdaq index late last week, the Nikkei index, which was dragged down by the high-tech shares, opened low in the morning and stuck in a narrow range within negative territory throughout the day.

Moreover, market participants were also worried about an uphill battle that the ruling LDP could face in the general election after losing one of two House of Councillors by-elections on Sunday.

The by-elections, the first national contests held since Japanese Prime Minister Fumio Kishida took office on Oct. 4, were closely watched as a bellwether for the general election. If the ruling parties failed to perform well in the general election, Kishida might face difficulties in managing the government.

"The results of the by-election proved that the opposition could possibly put up a good fight this weekend, with concerns that the government (under Kishida) may be short-lived if the ruling coalition loses too many seats," said Masahiro Ichikawa, chief market strategist at Sumitomo Mitsui DS Asset Management Co.

According to media polls, the LDP and its coalition partner, Komeito, would retain the majority in the House of Representatives consisted of 465 members. However, the ruling parties might face the prospect of losing seats as opposition forces work together to consolidate candidates across hundreds of voting districts.

Ichikawa added that investors also paid attention to corporate earnings results set to be released throughout the week, especially on revisions to profit forecasts due to ongoing higher energy costs and a global semiconductor crunch.

By the close of play, rubber products, information and communication, and air transportation firms were major decliners. On the First Section, losing issues outnumbered gaining ones 1,326 to 736, while 122 finished unchanged.

Blue-chip high-tech shares faced selling tracking a decline in their U.S. counterparts, with SoftBank Group dropping 3.4 percent and Tokyo Electron ending down 1.2 percent.

With the yen strengthening against the U.S. dollar late last week, some exporters were lower on Monday. Automakers Nissan Motor and Mazda Motor decreased 1.3 percent and 1.5 percent, respectively.

Bucking the downward trend, energy-related shares gained following crude oil futures rose in New York trading late last week, with Inpex rising 2.6 percent and Idemitsu Kosan climbing 0.9 percent.

Chugai Pharmaceutical surged 10.5 percent after it released Friday an upward revision on earnings forecast for the year through December from the previous estimate in February.
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