Nikkei drops to two-week low as China virus spreads; cyclicals lose ground

TOKYO, Jan 23 (Reuters) - Japanese shares skidded to
two-week lows on Thursday, led by commodity-related and other
cyclical stocks, as heightened anxiety about the spread of a new
coronavirus in China sapped confidence.
Investors were also wary ahead of corporate earnings,
pushing the Nikkei share average .N225 down 1.0% to 23,795.44,
its lowest closing level since Jan. 10. The broader Topix
.TOPX fell 0.8% to 1,730.50.
A broad range of shares fell, with all but two of the Tokyo
Stock Exchange's 33 industry subindexes in negative territory.
Traders said a sharp slide in commodity prices, partly due
to worries about China's virus outbreak, weighed on
commodity-related and other cyclical stocks. O/R MET/L
Deaths from China's new coronavirus rose to 17 on Wednesday,
with nearly 600 cases confirmed. The outbreak has evoked
memories of Severe Acute Respiratory Syndrome (SARS) in
2002-2003, another coronavirus which broke out in China and
killed nearly 800 people in a global pandemic. A potentially rapid spread of the virus, as millions of
Chinese travel domestically and abroad during the week-long
Lunar New Year holidays which start on Friday, kept global
health authorities and investors on edge.
Among the Tokyo bourse's subsectors, sea transport
.ISHIP.T , oil and coal products .IPETE.T and mining
.IMING.T were the worst performing subindexes, declining by
2.6%, 2.2% and 2.0%, respectively.
The Japanese yen JPY= firmed to a 1-1/2-week high of
109.53 yen versus the dollar as investors sought safety, though
it also served as a headwind for exporter stocks.
Bucking the overall weak trend, semiconductor automated test
equipment (ATE) maker Advantest 6857.T climbed 2.5% to its
highest in 13 years, after its U.S. competitor Teradyne's
TER.O fourth quarter earnings beat estimates. In Japan, Nidec Corp 6594.T and Disco Corp 6146.T are
due to announce their financial results for the October-December
quarter after the market close on Thursday.
Elsewhere, Rakuten Inc 4755.T lost 3.8% after media
reported Japan's antitrust regulator will launch an
investigation into the e-commerce giant over its free-shipping
policy of the company's online shopping mall.