TOKYO (AFP) – Tokyo stocks fell Tuesday morning as oil-linked firms took a beating after the price of crude tumbled to near a seven-year low.
The precipitous drop was in reaction to a decision last week by the Organization of the Petroleum Exporting Countries (OPEC) not to cut output despite a global supply glut.
Tokyo s fall came after a drop on Wall Street where energy shares took a beating, with the Dow and S&P 500 both losing 0.7 percent and the Nasdaq off 0.8 percent.
In Tuesday trading, Japanese energy explorer Inpex plunged 4.97 percent to 1,165 yen by the break, while JX Holdings, one of the country s biggest oil refiners, dropped 3.55 percent to 499.2 yen.
The benchmark Nikkei 225 index at the Tokyo Stock Exchange sank 1.03 percent, or 203.17 points, to 19,494.98, while the broader Topix index of all first-section shares fell 1.02 percent, or 16.23 points, to 1,568.98.
Better-than-expected Japanese economic growth data, published shortly before markets opened, appeared to have little impact on investors.
The world s number three economy grew 0.3 percent in the July-September quarter, according to revised figures, just weeks after initial estimates showed that it had fallen into recession, denting Prime Minister Shinzo Abe s growth blitz.
However, economists were cautious as consumer spending remained weak with little in the way of big wage hikes to put more money in people s pockets
“The data confirmed that the Japanese economy is growing gradually,” said Hideo Kumano, chief economist at Dai-ichi Life Research Institute.
“And while severe pessimism is receding, consumption — a key driver for the economy — is still weak. Without more spending and higher wages, the engine of the economy won t be ignited.”
Toyota fell 0.88 percent to 7,636 yen, banking giant Mitsubishi UFJ was down 0.90 percent at 796.4 yen and mobile carrier SoftBank slipped 0.24 percent to 6,354 yen.
Sony dropped 1.88 percent to 3,070 yen, as a pickup in the Japanese currency hit exporters.
The dollar weakened to 123.11 yen from 123.36 yen in New York on Monday, while the euro fetched $1.0850, up from $1.0835 in US trade. The single currency slipped to 133.57 yen from 133.67 yen.