Tokyo stocks end at 15-month low on oil price drop, China woes

TOKYO (Kyodo) -- Tokyo stocks plunged more than 2 percent Thursday, finishing at a 15-month low as a continuing rout due to sliding oil prices and concerns about the Chinese economy rattled investors.

The 225-issue Nikkei Stock Average ended down 398.93 points, or 2.43 percent, from Wednesday at 16,017.26. The broader Topix index of all First Section issues on the Tokyo Stock Exchange finished 37.48 points, or 2.80 percent, lower at 1,301.49.

Every industry category on the main section lost ground led by other financing business, real estate and foods.

Tokyo stocks opened higher on the yen's fall against the U.S. dollar that helped high-tech and other exporter issues, but gradually pared the gains. They plunged for the second consecutive day after the Nikkei lost more than 600 points Wednesday, marking the biggest one-day drop this year.

"The pattern of sharp declines in equities and rallies in less riskier assets is spreading across markets," said Maki Sawada of Nomura Securities Co.'s investment research department.

Sluggish Shanghai stocks also continued weighing on investors' risk appetite amid concerns about slower growth in China, one of the major destinations for Japanese exports.

Crude oil futures briefly fell to a fresh 12-year low of $26.19 per barrel in New York on Wednesday, dragging down U.S. stocks and subsequently impacting Tokyo shares.

Market participants will be keeping close tabs on allegations that Japanese Economic and Fiscal Policy Minister Akira Amari had received money in return for doing favors for a construction company, Chihiro Ota, general manager of investment research at SMBC Nikko Securities Inc., said.

Amari, one of the key economic ministers in Prime Minister Shinzo Abe's Cabinet, faced a barrage of questions from opposition lawmakers in parliament over the allegation sparked by a weekly magazine article.

His possible resignation could affect Diet deliberations on the recently agreed Trans-Pacific Partnership free trade accord between 12 countries, and have negative implications for Tokyo stocks, Ota said.

On the First Section, declining issues outnumbered advancing issues 1,860 to 60, while 15 ended the day unchanged.

The oil price crash continued undermining explorers and refiners.

JX Holdings fell 6.40 yen, or 1.6 percent, to 404.90 yen while TonenGeneral Sekiyu lost 12 yen, or 1.3 percent, to 890 yen. Japan Drilling dropped 52 yen, or 2.5 percent, to 2,067 yen.

Yaskawa Electric plunged 110 yen, or 8.0 percent, to 1,267 yen after the industrial machinery maker lowered its profit forecasts for the business year through March 20, citing a slowdown in the Chinese economy.

Bucking the downward trend, Sharp rose 7 yen, or 5.8 percent, to 128 yen, after the Wall Street Journal reported Wednesday Taiwan's Hon Hai Precision Industry Co. has made a bigger offer than earlier thought to take over the struggling electronics manufacturer.

Trading volume on the main section rose to 3,185.94 million shares from Wednesday's 2,566.22 million shares.