Japan Stocks Fall After Brussels as Machinery, Oil Shares Slide

  • Islamic State claims responsibility for Belgian explosions
  • At least 31 killed in blasts at airport, subway station

Japanese shares fell, led by machinery stocks and oil explorers, following deadly terrorist attacks in Brussels.

The Topix index slipped 0.4 percent to 1,364.20 at the close in Tokyo, swinging from a 0.6 percent gain. Volume was 37 percent below the 30-day average. The Nikkei 225 Stock Average retreated 0.3 percent to 17,000.98. The yen traded at 112.32 per dollar after weaken 0.4 percent on Tuesday following the bombs that killed at least 31 people in the Belgian capital. Islamic State militants claimed responsibility for the explosions.

“Because we’ve had terror attacks fairly frequently, the market has become stronger against these shocking events,” said Masahiro Ichikawa, a senior strategist at Sumitomo Mitsui Asset Management Co. However, “Japan is lacking catalysts and when shares rise, investors are quick to take profits.”

The Topix has recovered about half its losses since the global equity rout at the start of the year sent the gauge into a bear market. The measure is still down about 12 percent in 2016, and is trading about 14.3 times estimated earnings. That compares with 17.3 for the Standard & Poor’s 500 Index and 15.4 for the Stoxx Europe 600 Index. The Nikkei Stock Average Volatility Index fell on Wednesday, its lowest close this year.

Hitachi Construction Machinery Co. sank 2.3 percent after Macquarie Group Ltd. cut its share-price target. Plant operator Chiyoda Corp. lost 4.5 percent, the biggest drop on the Nikkei 225, after lowering its operating-profit forecast by 45 percent. Oil explorer Inpex Corp. sank 1.3 percent as crude prices slid before U.S. government data that is forecast to show rising oil stockpiles.

Sharp Rises

Sharp Corp. rose 1.6 percent. The struggling Japanese electronics maker and Foxconn Technology Group are discussing a lower price for a rescue package, the Nikkei reported. The new deal may be 100 billion yen ($891 million) lower than the initial price Foxconn had offered Sharp, half the reduction Foxconn had sought, the newspaper said.

Two bombs went off in rapid succession at the Brussels airport and an explosion an hour later hit a subway station a short walk from the European Union headquarters. The strikes, which follow terror attacks in Paris in November and a suicide bombing in Istanbul on March 19, may add to security concerns in Europe as officials deal with an influx of migrants. The explosions came during Tuesday morning’s rush hour.

Terrorist Incidents

Terrorist incidents including the one in the French capital as well as the London bombings in 2005 spurred equity selloffs that were erased in the following days and weeks. European shares pared a drop of as much as 1.6 percent Tuesday to close down 0.2 percent.

Futures on the Standard & Poor’s 500 Index lost 0.1 percent. The underlying gauge slipped 0.1 percent Tuesday as travel related shares helped drag the measure lower.

“Asian markets won’t see a lasting effect from the terrorist attacks in Belgium,” said Chihiro Ohta, general manager of investment information at SMBC Nikko Securities Inc. in Tokyo. “But it’s unlikely the markets will become extremely risk-on.”

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