Nikkei slumps to 2-month low on mounting geopolitical concerns
* Tensions in Ukraine, U.S. airstrikes in Iraq sour sentiment * Nikkei falls below 200-day moving average * Earning disappointment hits Nisshin Steel, Mitsubishi Materials By Hideyuki Sano TOKYO, Aug 8 (Reuters) - Japan's Nikkei share average slumped to two-month lows on Friday on worries that escalating tensions between Russia and the West could hurt the global growth. The Nikkei average fell 3.0 percent to 14,774.87, falling below an important support from its 200-day moving average at 14,958, to its lowest levels since mid-June. Risk appetite was depressed on concerns that Russia's ban on certain food imports from the West in retaliation against the West's sanctions on Moscow could hurt an already-fragile European economy. "Europe doesn't look good. Deflationary conditions are strengthening, raising concerns that monetary easing by the ECB may not be working. If you have geopolitical worries at a time like this, it's inevitable to see weakness in shares," said Hiroshi Ono, the head of equity investment at Sumitomo Life. The losses briefly widened after U.S. President Barack Obama said he authorised targeted air strikes against Islamic State fighters in northern Iraq to help besieged religious minorities there to prevent a "potential act of genocide". Softbank was the biggest drag, falling 3.1 percent as their shares smarted from the shock that its U.S. subsidiary Sprint Corp abandoned its bid to acquire T-Mobile U.S. Inc , a major part of Softbank's strategy to expand its U.S. business. Japan Tobacco, which has a large exposure to Russia, fell 3.1 percent. Some companies' disappointed investors, which could lead to worries that the impact of a sales tax hike in April could be bigger than initially thought. Nisshin Steel fell 11.5 percent while Mitsubishi Materials Corp fell 10.6 percent and Nippon Electric Glass fell 10.0 percent. The broader Topix fell 2.4 percent to 1,227.92 while the JPX-Nikkei Index 400 also dropped 2.4 percent. The Bank of Japan is widely expected to keep its policy on hold at its two-day policy meeting ending later in the day. (Reporting by Hideyuki Sano; Editing by Eric Meijer)
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