Japan’s Nikkei Hits 3-Week Low

On Thursday, Japan’s Nikkei market index plummeted to a three-week low as investors worried about the potential of quicker US monetary tightening, the crisis in Ukraine, and China’s COVID-19 lockdowns.

The Nikkei (NI225) fell 2% to 26,803.34, on track for its lowest session since March 11; chipmakers and automakers were among the worst performers. One hundred ninety-five equities fell, and 30 rose among the benchmark’s 225 components.

According to a local securities firm trader, “many concerns are still swirling around foreign events,” such as the Federal Reserve and the Ukraine conflict. Overnight, Wall Street fell after minutes from the Federal Reserve’s March meeting; it revealed rising concern among policymakers that inflation had spread throughout the economy, with many urging for more rate hikes.

The Topix (TOPIX) index in Japan declined 2% to 1,884.41. Pharma was the only one of the 33 sub-sectors on the Tokyo Stock Exchange to gain ground, rising 1.48 percent.

Astellas Pharma (4503), the Nikkei’s largest percentage gainer with a 4.53 percent surge after Jefferies confirmed its “outperform” recommendation for the stock, drove the sector higher.

European Shares Rise

Even as dangers from a hawkish Federal Reserve and Washington’s new sanctions on Russia had investors on edge, European equities recovered from a selloff on Thursday; meanwhile, healthcare firms surged to a record high.

After falling 1.5 percent on its lowest day in a month on Wednesday, the pan-European STOXX 600 index (.STOXX) gained 0.3 percent. However, the London Stock Exchange’s commodity-heavy FTSE 100 index (.FTSE) underperformed regional counterparts due to a drop in basic materials (.SXPP) and oil stocks (.SXEP).

Shell (SHEL.L) fell 1.8 percent after announcing a $5 billion write-down in the first quarter due to its decision to leave Russia; more significant than previously revealed.

Stock markets in Asia and the United States fell after minutes from the Fed’s March meeting revealed that members “largely agreed” to reduce the central bank’s asset holdings by up to $95 billion per month to combat rising inflation.

As geopolitics and central bank hawkishness dampen morale, the STOXX 600 index should close the week. The US imposed a new wave of penalties on Russian banks and leaders; this includes a prohibition on American investment in the country.

Before the first round of voting on April 10, French equities (.FCHI) climbed 0.3 percent after losing more than 3% in the previous two sessions, indicating that the presidential race is too close to call.