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Japan stocks drop 1.6% as oil slide, renewed pandemic woes weigh

TOKYO, March 24 (Reuters) - Japanese shares fell for a fourth consecutive session on Wednesday as renewed concerns about the return of coronavirus lockdowns in Europe and declining oil prices dented hopes of an acceleration in the global economy.

The Nikkei 225 Index was down 1.64% at 28,520.84 by 0202 GMT, and the broader Topix dropped 2.19% to 1,928.18.

Energy shares led the decline as Germany’s extension of pandemic lockdowns and lingering doubts about the safety of a popular coronavirus vaccine curbed expectations for a rebound in economic growth and demand for oil.

However, some technology shares got a boost on plans to increase investment in the production of cutting-edge semiconductors to relieve global supply shortages.

Sentiment for Japanese shares was somewhat cautious as investors are expected to book profit before the fiscal year ends on the last day of this month.

“The decline in oil prices is a direct blow to the energy sector, but you can also see investors are selling shares that until recently were rallying very sharply,” said Takashi Nishizawa, head of investment research at Nomura Securities.

“Investors are starting to realise that their optimism about the outlook was a little excessive.”

The largest percentage losses in the Nikkei index were ANA Holdings Inc down 7.87%, followed by Unitika Ltd losing 7.49%, and Nippon Yusen KK down by 7.44%.

The largest percentage gainer in the index was Nikon Corp , which rose 8.88% on speculation it will benefit from U.S. semiconductor maker Intel Corp to greatly expand its advanced chip manufacturing capacity.

Tokyo Electron Ltd rose 5.44% and Screen Holdings Co Ltd climbed 3.21% after the Nikkei newspaper reported that the two companies will collaborate with a Japanese government project that will invest in domestic manufacturing facilities for next-generation chips. (Reporting by Stanley White, Editing by Sherry Jacob-Phillips)

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