Tokyo's Nikkei Ends Down As Sony Plunges On Activision Deal
Mohammad Ali (@ChaudhryMAli88) Published January 19, 2022 | 12:50 PM
Tokyo's benchmark Nikkei index dipped more than three percent Wednesday as market heavyweight Sony plummeted on news of Microsoft's plans to buy US gaming giant Activision Blizzard
Tokyo, (UrduPoint / Pakistan Point News - 19th Jan, 2022 ) :Tokyo's benchmark Nikkei index dipped more than three percent Wednesday as market heavyweight Sony plummeted on news of Microsoft's plans to buy US gaming giant Activision Blizzard.
The Nikkei 225 was down 3.33 percent shortly before the closing bell, and finished 2.80 percent lower at 27,467.23.
The broader Topix index gave up 2.97 percent, or 58.66 points, to close at 1,919.72.
International investors have been wary as speculation mounts about more aggressive US rate hikes than previously expected.
Rising oil prices, increasing US yields, a drone attack on Monday in Abu Dhabi, and weak US corporate earnings also all weighed on the global market and made for a sluggish start to the Tokyo trading day.
But the market was dragged down further as investors dumped Sony Group, which closed 12.79 percent to 12,410 Yen after microsoft announced the $69 billion deal for Activision.
Acquiring the troubled but successful Activision, maker of the "Call of Duty" franchise, will turn Microsoft into the third-largest gaming company by revenue, behind Tencent and Sony -- a major shift in the sector.
Some pundits have speculated the US titan would make future Activision titles exclusive to Xbox, shutting out the PlayStation franchise.
"Microsoft's move... triggered worries that competition in the game sector will further intensify," Chihiro Ota of SMBC Nikko Securities told AFP.
"If you consider things calmly, some people say it might not have the kinds of impact that many worry about." Nonetheless, Ota added, the news "had a large impact and affected investor sentiment".
The market was also affected by losses for the world's top-selling car maker Toyota, which ended down 4.97 percent to 2,303 yen.
The firm said Tuesday that it no longer expects to meet its annual production target with operations hampered by the global chip crunch.
The news means the industry as a whole and other automakers likely face similar or possibly tougher situations, Ota said.
Toyota's shares have recently been hitting record highs, making them vulnerable to profit taking, he added.
"Toyota is very adept at managing its supply chain. What this showed is that even Toyota can face a situation like this," he said.
Among other major shares in Tokyo, Nintendo gave up earlier gains and ended down 0.22 percent to 53,290 yen.
Construction equipment maker Komatsu fell 1.34 percent to 2,973.5 yen. Industrial robot maker Fanuc fell 2.35 percent to 22,480 yen.
SoftBank Group fell 1.74 percent to 5,412 yen. Japan Airlines fell 1.21 percent to 2,115 yen.
The Dollar stood at 114.27 yen in Tokyo, off from 114.60 yen seen Thursday in New York.
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