Japan’s Nikkei Surges 3% Amid G7 Talks on Steps to Stabilise Global Oil Prices
Japanese stock markets faced a quick decline on Monday. The Nikkei index dropped considerably and reached a two-month low.
Japan’s Nikkei index dropped nearly 7% amid rising oil prices and growing global economic uncertainty.
On Monday, amid an open selloff, the Japan Nikkei index average fell 7% to a two-month low. The surge in oil prices fanned fears of inflation and a financial slowdown. The Nikkei fell 6.98% to 51,740.46, which are lowest since January 9. On the other hand, the wider Topix slipped 5.6% to 3,508.72.
The Nikkei standard futures fell close to 7.8%. It is close to a level that could have triggered the circuit breaker to postpone trading. In just two weeks, both the Nikkei and Topix hit record highs as per the expectation of profit growth, supported by Prime Minister Sanae Takaichi's motivation and rally driven by artificial intelligence.
Japanese Finance Minister Satsuki Katayama declared that G7 energy ministers are expected to meet tonight to talk about the process of emergency oil reserves.
U.S. President Donald Trump said the Middle East conflict's impact could be over soon, even as Iran's hardliners staged a show of loyalty to new Supreme Leader Mojtaba Khamenei.
There were 85 gainers in the Nikkei index against 19 decliners.
The largest profit gainers in the index were Lasertec. It gained up 10.7%, followed by Fujikura, which surged 10%. The biggest losers were BayCurrent, down 3%, followed by SHIFT, which moved back 2.6%.
Hitoshi Asaoka, chief strategist at Asset Management One, said, "The market started taking the impact of the Middle East conflict more seriously. Until last week, there was some optimism and investors picked up stocks on dips, but now there is a question about the market upside".
Investors are now keeping a close eye on the result of the G7 meeting. It will surely influence global energy markets and the way of Japanese equities in the upcoming days.
