Nikkei tracks overnight Wall Street losses to hit near two-week low

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TOKYO — Japan’s Nikkei share average hit a near two-week low on Wednesday, tracking overnight Wall Street losses, although gains in energy companies on higher crude prices limited losses.

Nikkei was down 0.33% at 28,359.10 at the midday break, on track for a fifth straight day of declines. It touched 28,282.21, its lowest level since Aug. 12, earlier in the session.

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The broader Topix edged down 0.09% to 1,969.74, after hitting its lowest since Aug. 12 at 1,964.28.

The U.S. S&P 500 skidded to a two-week closing low overnight after weak business activity data stoked recession worries, amid a chorus of hawkish comments from Federal Reserve officials before the central bank’s key Jackson Hole symposium that starts Friday.

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“There was some sense that we might see a pause in the recent selloff, but its difficult for the market to turn around as people position ahead of a big event,” a market participant at a domestic asset management firm said.

Technology was the worst performing sector on the Nikkei, followed by healthcare and consumer stocks.

The top three decliners on the index were gamemaker Konami , down 2.82%, Nintendo falling 2.36% and Bandai Namco which slid 2.03%. Sony eased 0.52%.

Among other heavyweights, Uniqlo store operator Fast Retailing dropped 0.87% and chipmaking equipment maker Tokyo Electron declined 1.68%, becoming the biggest drag on Nikkei in percentage points.

The energy sector on the other hand, led gains, as crude oil surged close to 4% overnight after Saudi Arabia floated the idea of OPEC+ output cuts.

“Investors are taking advantage of strengthening inflation worries to buy energy stocks,” a market participant at a Japanese brokerage said.

Tokyo Electric was the Nikkei’s top gainer, leaping 8.37% after a local media report said that the government was preparing to restart some nuclear reactors.

Toyota truck unit Hino Motors rebounded 5.26% after slumping to a more than two-year low on Tuesday amid an emissions scandal. (Reporting by Tokyo markets team; Editing by Rashmi Aich)

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