Japan’s Nikkei index slipped by 0.01% to 28,868.91 on Tuesday, effectively ending a two-day rally. As observed by Shuji Hosoi, a senior strategist at Daiwa Securities, this comes amid fears of an economic slowdown across the Chinese and U.S. economies led investors to lose confidence.
Energy stocks and shippers seemed to suffer the worst losses, with shipping firms suffering the most with a decline of 4.08%. Oil explorers and refiners declined by 1.48% and 1.5% respectively after oil prices fell due to demands in China; the world’s leading crude buyer.
Mitsui O.S.K. Lines emerged as the worst performer on the index, plummeting by 4.12%. The transport company was closely followed by Nippon Yusen and Kawasaki Kisen Kaisha, falling 4.09% and 3.98% respectively.
At the heart of the Chinese economic slowdown is the country’s strict zero-COVID policy, leading to the sporadic shutdown of factories amid virus breakouts. The resulting decline in manufacturing and retail activity, together with an ongoing property crisis, led China’s central bank to cut lending rates on Monday in an effort to revive demand.