Nikkei Plunges Below 38,000 Mark as Election UncertaintyWeighs on Market
Tokyo, October 25, 2023 – The Nikkei 225 index closed lower on Tuesday, falling below the 38,000 mark for the first time inthree weeks, as investors grappled with uncertainty ahead of Sunday’s general election. The benchmark index dropped 229.37 points, or 0.60%, to finish at 37,913.92, marking a decline of roughly 2.6% since the lower house dissolution on October 8th.
The TOPIX index, which tracks broader market performance, alsoclosed down 0.65% at 2618.32, losing 17.25 points. Trading volume reached approximately 1.565 billion shares.
The market’s downward trajectory comesdespite the historical trend of a post-dissolution rally in the lead-up to Japanese elections. In the past 17 elections, the Nikkei has consistently climbed from the dissolution date to the election day. However, this time, pre-election polls showing the ruling Liberal Democratic Party facing a tough fighthave fueled concerns about political instability and uncertainty, prompting investors to adopt a risk-averse approach.
The market is clearly nervous about the election outcome, said a Tokyo-based market analyst. With the polls suggesting a close race, there’s a heightened sense of uncertainty about the future direction of policy.
Thedecline was further exacerbated by a negative performance in the US markets overnight, with the Dow Jones Industrial Average closing lower. Selling pressure was also seen in semiconductor stocks, which have been trading at high levels.
As the election draws nearer, investors are likely to remain cautious, with the market’s direction heavily dependent on the outcomeof the vote.
References:
- Kyodo News (2023, October 25). Nikkei Plunges Below 38,000 Mark as Election Uncertainty Weighs on Market. Retrieved from [insert URL]
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