Nikkei closes at lowest since March on global growth concerns

TOKYO: Japan's Nikkei closed at nearly nine-month lows on Tuesday as worries about global growth pressured financial and cyclical stocks, while uncertainty over a US-Japan trade deal hit automakers.

The Nikkei share average ended 0.3 per cent lower at 21,148.02, the lowest close since late March.

The broader Topix fell 0.9 per cent to 1,575.31, the lowest closing level since May 2017.

Financial shares underperformed, dragged down by a sell-off in global peers such as Citigroup and Bank of America , after uncertainty over Britain's exit from the European Union kept investors on edge about global growth.

Mitsubishi UFJ Financial Group tumbled 2.0 per cent and Sumitomo Mitsui Financial Group shed 1.6 per cent.

"As investors are worried about the impact on slowing global growth and interest rates on banks, they are likely to avoid buying banking shares for a while," said Takuya Takahashi, a strategist at Daiwa Securities.

Life insurers, which invest in higher-yielding products such as foreign bonds, lost ground as well. Dai-ichi Life Holdings slid 1.5 per cent and T&D Holdings stumbled 2.8 per cent.

Cyclical stocks such as technology and electronic components makers were sold. Sharp Corp tumbled 4.4 per cent to a level not seen since September 2016, Murata Manufacturing dropped 1.3 per cent and TDK Corp declined 2.3 per cent.

Automakers were sold after Detroit peers and labour unions on Monday insisted that any US trade deal with Japan contain strong provisions to combat currency manipulation and pry open Japan's largely closed auto market before any lowering of US autos tariffs.

Nissan Motor slumped 3.1 per cent and Subaru Corp tanked 2.4 per cent.

Analysts said retail investors were seen selling some of their overall holdings to prepare for the Dec. 19 listing of SoftBank Group's telco unit SoftBank Corp.

SoftBank said that demand was greater than the number of shares on offer.

"Retail investors are seen taking profits on some of their holdings to buy SoftBank shares today as it takes several days to convert stocks to cash," said Norihiro Fujito, a chief investment strategist at Mitsubishi UFJ Morgan Stanley Securities.

"Their selling is also thought to be one of the reasons for the market's weakness."

Defensive stocks outperformed. Chubu Electric Power Co and Tokyo Gas both rose 0.8 per cent and realtor Mitsui Fudosan gained 1.5 per cent.