Japan Nikkei tumbles on global risk-off selling

Headline indices of the Japan share market tumbled on Thursday, 25 October 2018, as risk aversion selloff triggered across the board on following selloff on Wall Street overnight and yen appreciation to upper 111 level against greenback. Market risk sentiments deteriorated in recent sessions amid ongoing the US-China trade war, earnings disappointment, a growing conflict over budget spending between Italy and the European Union, international criticism levelled at oil power Saudi Arabia over the killing of a dissident journalist and worries that global growth is losing steam. All TSE 33 issues declined, with shares in Services, Electric Appliances, Nonferrous Metals, Pharmaceutical, Glass & Ceramics Products, Marine Transportation, Chemicals and Machinery issues being notable losers. In afternoon trades, the 225-issue Nikkei index tumbled 643.96 points, or 2.92%, at 21,447.22. The broader Topix index of all First Section issues on the Tokyo Stock Exchange dropped 40.39 points, or 2.44%, to 1,611.68.

Thursday's tumble follows a fall by US stocks overnight, which confirmed a correction for the Nasdaq and erased the Dow and S&P 500's gains for the year amid disappointing earnings, economic growth concerns, a spat between Italy and the European Union and the killing of a Saudi journalist.

CURRENCY NEWS: Japanese yen, widely viewed as a safe haven currency, appreciated against greenback on Thursday as a rout on Wall Street and weak European and US economic data dented global risk sentiment, sending investors scurrying to safe-haven assets including government bonds. The yen was at 111.87 against the dollar after strengthening from levels above 112.6 in the previous session.

OFFSHORE MARKET: US stock market closed down Wednesday, as fear that the economy is exiting the "peak" earnings environment helped by US tax cuts that were enacted late last year. Investors also have been unnerved by comments from industrial companies saying trade conflicts have raised material costs. The Dow Jones Industrial Average lost 2.4% to close at 24,583.42. The tech-rich Nasdaq Composite Index plummeted 4.4% to finish at 7,108.40, while the broad-based S&P 500 sank 3.1% to 2,656.15.

European markets also ended down on Wednesday after widely watched Purchasing Managers Index (PMI) survey reports showed Euro zone business growth slowed more than expected this month. German private-sector growth fell to its lowest in more than three years, and manufacturing in France hit a 25-month low, according to other surveys. The European Central Bank (ECB) holds its monetary policy meeting later today, and investors will be looking for any new guidance from the ECB acknowledging the recent slowdown in growth as well as the political stand-off between Brussels and Rome over Italy's free spending budget. The U.K.'s FTSE 100 Index inched up by 0.1%, the French CAC 40 Index dipped by 0.3%, and the German DAX Index slid by 0.7%.

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