Japan stocks track China markets lower as coronavirus spreads

By Stanley White
TOKYO, Feb 3 (Reuters) - Japanese shares closed lower on
Monday, tracking a sharp sell-off in Chinese equities, on rising
worries over the economic impact from the coronavirus outbreak
in China.
The Nikkei index .N225 ended 1.01% lower at 22,971.94,
with consumer discretionary and information technology sectors
leading declines.
Chinese markets .CSI300 , which were closed since the end
of trade on Jan. 23 for Lunar New Year holidays, reopened on
Monday with a steep fall of more than 9%.
The number of deaths from the virus jumped to 361 as of
Sunday, the country's health authority said on Monday.
Economists have already warned the outbreak will weigh on
consumer spending, tourism, and factory activity in the world's
second-largest economy, which could weigh on Japan too, as China
is one of the country's top export markets.
"It is difficult to judge by only one day of trading, but
sentiment will weaken if Chinese shares continue to fall, which
is bad for Japanese stocks," said Shusuke Yamada, head of FX and
Japan equity strategy at Merrill Lynch Japan Securities Co in
Tokyo.
"It's uncertain how this will affect earnings-per-share
ratios for Japanese stocks. So it is difficult to say where the
Nikkei will find support."
Meanwhile, Japan's manufacturing activity shrank for a ninth
month in January as output and new orders contracted again,
pointing to further strains on the economy, a business survey
showed. There were 41 advancers on the Nikkei index against 177
decliners.
The largest percentage loser on the index was materials
manufacturer Unitika Ltd 3103.T , down 10.93%. Shares in the
company, which makes materials used in surgical masks, fell as
investors booked profits.
Department store operator Isetan Mitsukoshi Holdings Ltd
3099.T was the second-biggest decliner, ending down 6.85%. The
company lowered its profit forecasts on Friday after market
hours, partly reflecting an expected decline in Chinese tourism
to Japan.
The third-biggest decliner was auto parts and metals
supplier Toyota Tsusho Corp 8015.T losing 6%.
The largest percentage gainers were processed food and
healthcare company Ajinomoto Co Inc 2802.T up 6.09%, followed
by drugs maker Eisai Co Ltd 4523.T gaining 4.21%, and parcel
delivery firm Yamato Holdings Co Ltd 9064.T up by 4.17%.
The broader Topix index .TOPX fell 0.7% to 1,672.66.
The volume of shares traded on the Tokyo Stock Exchange's
main board .TOPX was 1.19 billion, compared with the average
of 1.09 billion in the past 30 days.