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Japan's Nikkei share average fell on Monday morning, reaching a 1-1/2 weeks low, on lacklustre China economic surveys and weak US stocks, while investors traded on individual company earnings news.
The Nikkei dropped 1.7 per cent to 18,759.77 in mid-morning trade after slipping to 18,735.60, the lowest level since October 22.
An official survey released over the weekend showed that activity in China’s manufacturing sector unexpectedly contracted in October for a third straight month, fuelling fears the economy may still be losing momentum in the fourth quarter despite a raft of stimulus measures.
On Monday, a private survey showed that China’s factory activity fell for an eighth straight month in October but at a slower pace as export orders revived.
Wall Street on Friday was hit by downbeat corporate earnings, which dragged down Nikkei futures trade on Monday morning before the cash market opened.
“Global market worries triggered selling, while the market was prone to profit-taking from last week’s gains,’’ said Hikaru Sato, a senior technical analyst at Daiwa Securities.
Analysts said that in the mid-term, expectations that Beijing will release measures to support the economy will likely support the mood.
Exporters lost ground, with Honda Motor Co falling 1.5 per cent, Nissan Motor Co 1.7 per cent and Panasonic Corp 2.2 per cent.
Shipper Kawasaki Kisen Kaisha, which was downgraded by CLSA after a dismal earnings result, stumbled 8.1 per cent.
Kawasaki has cut its full-year operating profit forecast to ¥24 billion from ¥39 billion for the year ending March 2016. CLSA has cut its rating to ‘outperform’ from ‘buy’, citing a negative outlook for container prices.
Murata Manufacturing Co soared more than 5 per cent after reporting that operating profit for the April-September period jumped 71 per cent on the year to ¥152.14 billion and hiked its full-year forecast.
The broader Topix shed 1.8 per cent to 1,530.02 and the JPX-Nikkei Index 400 declined 2.0 per cent to 13,726.12.
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