Japan Stocks plunge as oil crash curbs risk appetite

Stocks in Japan market finished lower for third straight session on Wednesday, 22 April 2020, on tracking fall on Wall Street overnight, as a rout in crude oil prices underscored fears of severe economic fallout from the coronavirus pandemic and fuelled broad risk-off sentiment. At closing bell, the 225-issue Nikkei Stock Average stumbled 201.89 points, or 1.05%, to 19,078.89. The broader Topix index of all First Section issues on the Tokyo Stock Exchange declined 12.43 points, or 0.88%, at 1,403.46.

Total 25 issues of 33 industry category of Topix index were in negative territory, with Air Transportation, Oil & Coal Products, Mining, Iron & Steel, Nonferrous Metals, and Rubber Products issues being notable losers, while Pulp & Paper, Pharmaceutical, and Land Transportation issues were notable gainers.

The US market provided a weak lead overnight, with the Nasdaq down by 3.5% and the Dow Jones down 2.7%. This marked the first back-to-back losses for the American equity market since April 1.

Skittish investors sought the safety of government debt as Brent oil futures plunged for a second day to a low last seen almost two decades ago, fueled by a swelling world crude glut. Concerns about oil storage availability amid weaker demand for the commodity and a week long dispute between Russia and OPEC nations, have propelled the historic oil sell-off. OPEC and Russia eventually agreed to cut production by 10 million barrels per day in May.

Oil prices remained volatile in overnight trade. West Texas Intermediate's contract for May delivery -- which traded below $0 on Monday for the first time in history -- rebounded slightly Tuesday but was trading at less than $5. For June delivery, which experts view as a better indicator of how Wall Street views oil prices, WTI fell 43.4% to $11.57 per barrel on Tuesday. The crude price rout extended to global benchmark Brent with the contract for June deliveries closed at $19.33.

In the Asian trading hours on Wednesday, he June contract for West Texas Intermediate (WTI) clawed back some Tuesday losses as it jumped 11.32% to $12.88 per barrel, after falling more than 40% on Tuesday. Meanwhile, international Brent crude futures fell 2.43% to $18.86 per barrel, having plunged from levels above $24 per barrel on Tuesday.

Major shares were lower across the board, with Honda dropping 2.2%, electronic parts maker TDK off 2%, and Panasonic down 3.7%.

In the oil sector, Japan Petroleum fell more than 3 percent and Inpex was lower by more than 2 percent after crude oil prices plunged 43 percent overnight.

Bucking the trend, Nintendo climbed 1.9% after reports said that San Francisco-based investment fund ValueAct Capital holds over 2.5 million shares, or some 2% of the gaming company's outstanding shares.

CURRENCY: The U.S. dollar index, which tracks the greenback against a basket of its peers, was last at 100.221 after seeing levels below 99.5 last week. The Japanese yen traded at 107.82 per dollar after weakening from levels below 107.6 yesterday.

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