October 31, 2020

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Nikkei is falling due to tensions in the US and China

Nikkei is falling due to tensions in the US and China


Photo: ANP

The Japanese stock market ended lower again on Friday. The escalating tensions between the United States and China due to the ban on transactions with Chinese companies behind the popular apps TikTok and WeChat in Washington led to investors’ reluctance. In addition, they looked forward to the important US job report, which will still be published today.

The Chinese stock markets showed significant losses. US President Donald Trump signed a presidential decree banning US company transactions within 45 days with ByteDance, the Chinese company behind TikTok, and Tencent, the owner of WeChat. Trump fears that companies will release information about American citizens to the Chinese government through the popular apps.

The main index in Shanghai has since lost 1.4 percent and the Hang Seng index in Hong Kong has fallen by 1.7 percent. Chinese internet giant Tencent lost more than 4 percent and saw its market value decline by billions. On the macroeconomic level, on the other hand, Chinese exports rose much more than expected in July. However, imports dropped unexpectedly. Kospi in Seoul rose 0.4 percent and Australian All Ordinaries in Sydney lost 0.5 percent.

The Nikkei in Tokyo started the long weekend with a minus of 0.4 percent to 22,329.94 points. It was the third loss in a row. The Tokyo fair is closed on Mondays due to a national holiday. Chip equipment maker SUMCO fell nearly 9 percent due to disappointing results. The other Japanese chip manufacturers were also under pressure. The camera manufacturer Nikon fell by more than 7 percent to its lowest level since 1995. The company expects an operating loss for the current financial year.

Nintendo, on the other hand, grew by 2.6 percent. The Japanese video game company more than doubled its quarterly profit and more than doubled its sales. Nintendo took advantage of those at home who started playing more during the Corona crisis.