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 February 8, 2016 - 5:05 PM EST
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UPDATE1: Tokyo stocks end over 5% down on global equity sell-off

stocks nose-dived Tuesday as
and European equities sank overnight led by a sell-off in bank shares, fueling concerns about the global economic outlook.

The 225-issue Nikkei Stock Average ended down 918.86 points, or 5.40 percent, from Monday at 16,085.44, a roughly three-week closing low. The broader Topix index of all First Section issues on the Tokyo Stock Exchange finished 76.08 points, or 5.51 percent, lower at 1,304.33.

Every industry category on the main section lost ground led by securities brokerage, bank and marine transportation issues.

After opening sharply lower,

stocks accelerated their declines as the yen climbed against the dollar and investors fled to safe-haven bonds. The Nikkei index shed 978 points at one point, its biggest one-day drop since May 2013.

On the First Section, declining issues trounced advancing ones 1,904 to 27, while six ended the day unchanged.

Trading volume on the main section rose to 3,173.35 million shares from Monday's 2,738.03 million shares.

After hovering around the 117 yen line the previous day, the dollar weakened, dropping below the 115 yen line.

"Japanese equities have been dragged down by the yen's spike but they are also tracking the global sell-off stemming from the free falls in European bank shares, including those of Deutsche Bank, damaging risk appetite," said Toshikazu Horiuchi, equity strategist at IwaiCosmo Securities Co.

Horiuchi said market sentiment had already been weak with central banks around the world on diverging paths, causing persistent concern about the health of the global economy.

Takuya Takahashi, senior strategist at Daiwa Securities Co., said fears that

the United States
could be heading toward a recession, coupled with the global stock market slump, curbed risk appetite and sent investors to safe-haven assets.

Takahashi added selling of financial stocks mainly led to the fall in the broader

market, reflecting the drops in
and European markets overnight.

Among financial issues, Nomura Holdings dived 50.80 yen, or 9.1 percent, to 510.00 yen, while Shinsei Bank plunged 14 yen, or 9.1 percent, to 140 yen.

Mizuho Financial Group dropped 11.30 yen, or 6.2 percent, to 170.30 yen after its core banking unit said Monday it will cut rates for some deposits, reflecting recent interest rate falls triggered by the Bank of Japan's decision to adopt a negative interest rate.

Japan Post Bank, which also announced deposit rate cuts Monday, shed 67 yen, or 5.0 percent, to 1,260 yen.

Analysts said buying of government bonds and a further decline in oil prices were also to blame for the stock sell-off. The yield of the benchmark 10-year government bonds hit 0 percent in the morning, before turning negative later in the day.

The crude oil futures price fell below the $30 line for the first time in roughly a week in

New York
on Monday, hitting $29.69 per barrel on dimming prospects that members of the Organization of the Petroleum Exporting Countries will cut production.

As for resource-related issues, Cosmo Energy Holdings lost 98 yen, or 7.7 percent, to 1,174 yen.


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Source: News (February 8, 2016 - 5:05 PM EST)

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