TOKYO, Oct 14 (Reuters) - Japanese stocks fell in early Wednesday trade, weighed down by uncertainty over the prospects for China’s slowing economy which had also sent Wall Street lower.
The Dow snapped a seven-day winning streak on fears of slowing growth in China and selling in biotech shares, and market players said the weakness carried over as uncertainty and risk-off sentiment clings to Tokyo stocks.
The Nikkei share average fell 2 percent to 17,871.50 during the morning session, dipping below 18,000 for the first time since October 5. Short-covering drove an early October rally, but traders said it was likely short-lived.
“Investors are still a bit shell-shocked from the volatility we saw in August and September, so any rally or retrenchment has to be viewed with great suspicion,” said Stefan Worrall, cash equities manager at Credit Suisse.
“There’s a lack of fundamental signals from data or policy makers at the moment so the cues are coming from short-term news flow and U.S. earnings.”
Consumer inflation in China eased more than expected in September while producer prices fell for the 43rd straight month, data from the National Bureau of Statistics showed, adding to concerns over growing deflationary pressures in the world’s second-largest economy.
Steel companies, which are among the most exposed to China, were among the hardest hit during the morning session as the Topix subindex for iron and steel shed 3.8 percent. JFE Holdings shares fell 4.5 percent while Kobe Steel lost 2.6 percent.
Crude oil futures continued to tumble on renewed worries of a supply surplus, further damaging oil-related stocks, which underperformed.
Inpex Corp shares tumbled 4.8 percent and Japan Petroleum Exploration Co fell 1.6 percent.
Toho bucked the weakness and rose 4.2 percent after announcing record profit forecasts.
The broader Topix shed 2.3 percent to end the morning session at 1,468.52 with all but one of its 33 sub-indices in negative territory.
The JPX-Nikkei Index 400 fell 2.4 percent to 13,148.42.
Reporting by Joshua Hunt; Editing by Miral Fahmy