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Japan's Nikkei slumps as wider Middle East conflict dents sentiment
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Japan's Nikkei slumps as wider Middle East conflict dents sentiment
Oct 2, 2024 10:45 PM

(Updates with prices and details, as of 0600 GMT)

By Brigid Riley

TOKYO, Oct 2 (Reuters) - Japan's Nikkei share average

ended lower on Wednesday, as deeper tensions in the Middle East

left investors with little appetite for riskier assets while

markets awaited further developments.

The Nikkei extended losses to slide 2.18% to an over

one-week closing low of 37,808.76, while the broader Topix

finished 1.4% lower at 2,651.96.

Iran launched ballistic missiles on Tuesday, spurring vows

from Israeli Prime Minister Benjamin Netanyahu that its arch foe

would pay for the attack. Tehran said any retaliation would be

met with "vast destruction", raising fears of a wider war.

"The escalation in the Middle East has resulted in a classic

risk-off reaction, posing headwinds for broader Japanese

equities," said Charu Chanana, global market strategist and head

of forex strategy at Saxo.

Japanese technology shares led losses, following their U.S.

peers lower after a nearly 3% drop on the Philadelphia SE

Semiconductor index overnight.

Wall Street's three main stock indexes also ended lower on

Tuesday, with the Nasdaq losing more than 1%, as a risk-off mood

spread following news of Iran's attack.

Chip-related shares Tokyo Electron ( TOELF ) and Advantest ( ADTTF )

slipped 3.7% and 4.8%, respectively, while AI-focused

startup investor SoftBank Group fell 2.4%.

Defence-related stocks, which were among the few gainers

in early trade, were sold off, including Kawasaki Heavy

Industries ( KWHIF ) down 0.6%.

Of the index's 225 constituents, 187 ended in the red.

Uniqlo parent firm Fast Retailing ( FRCOF ) shed nearly 4% to

weigh the heaviest in the Nikkei.

Bucking the trend, energy shares were supported by a jump in

oil prices on fears that the Middle East conflict could disrupt

supply. Inpex ( IPXHF ) was up 4.41% to top the index's

percentage gainers.

Oil and coal producers were among the best

performers by sector, with a 2.2% jump, just behind miners

that advanced 4.3%.

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