Roundup: Nikkei plummets 5.36 pct, logs biggest daily loss since Brexit on Trump lead

Tokyo stocks tumbled Wednesday, with the Nikkei index plummeting more than 5 percent, as investors rushed to dump issues as election projections showed Republican candidate Donald Trump would win the U.S. presidential race in a shock defeat of Democratic Party nominee Hillary Clinton.

The 225-issue Nikkei Stock Average lost 919.84 points, or 5.36 percent, from Tuesday to end the day at 16,251.54, marking its biggest daily drop since Britain voted to leave the European Union on June 24, while the broader Topix index of all First Section issues on the Tokyo Stock Exchange dropped 62.33 points, or 4.57 percent, to finish at 1,301.16.

Despite getting off to solid start as investors seemed confident that Hillary Clinton would win the U.S. presidential election, stocks moved in and out of positive territory before slumping as polls began to show that Trump would likely win key swing states, with investors turning pessimistic on concerns a Trump presidency could see trade deals reversed and a protectionist stance adopted, which spooked Japan's exporters and its automaker sector in particular.

Exporter issues subsequently took a hit as the U.S. dollar rose above the 105 yen line in early trade, only to tumble more than 3 yen at one point to around the 102 yen line, as the votes in the U.S. presidential election were shown to be coming in more favorable for Trump, in a tight race.

As the yen surged on the news, Japan's key exporter sector turned negative as a strong yen impacts the earnings and projections of companies are exposed to overseas markets and relying on favorable currency exchanges when profit yields are repatriated. Analysts noted that exporter issues turning negative has a significant bearing on the broader market and spurred a risk-off mood.

"There is now a high possibility of Trump winning and a 'Trump shock' has turned the market risk-off. Results are showing that he is doing much better than the markets had expected," Mizuho Securities Co.'s Yutaka Miura, was quoted as saying.

Other analysts said markets here had already factored in a Clinton win and as such a risk-off mood could continue for a week, as investors remain unsure of the future direction of U.S. political and economic direction fearing, among other issues, Trump's previous comments on economic protectionism.

"The markets had bet on Clinton too much and that is coming off now. Share prices could plunge even more," said Daisuke Uno, a chief market strategist at Sumitomo Mitsui Banking, adding that "share prices could plunge even more."

"Strong pessimism weighs on the market, and the market would probably suffer extended drops for about a week," added Akio Yoshino, chief economist of investment management division at Amundi Japan.

Among notable exporter-linked shares that lost ground, Toyota Motor skidded down 6.5 percent to 5,510 yen, while Nissan Motor reversed 6 percent to 973 yen. Honda Motor, meanwhile, was also among notable decliners, losing 7.8 percent to 2,735 yen.

Other issues that logged significant declines included materials and electronics company Taiyo Yuden Co., Ltd. which tumbled 12 percent to 946 yen, while Mitsumi Electric Co., Ltd. dropped 9.7 percent to close at 530 yen.

Mitsui Mining and Smelting Co. was also among the day's biggest losers, falling 10.6 percent to close at 211 yen.

Financial-linked issues also took a hammering, prior to the Japanese government and officials from the Bank of Japan calling an emergency meeting as the yen surged and other Asian bourses tumbled, with Nomura Holdings losing 6.2 percent and Mitsubishi UFJ Financial Group falling 5.9 percent.

Among issues that fell on individual news, precision instrument maker Nikon dropped 6.6 percent to 1,539 yen after it announced it had cut its group net profit forecast, anticipating a loss for 2016, while Japan Petroleum Exploration sank 6.9 percent to 2,036 yen after it lowered its profit forecast for the current business year.

All industry categories on the main section closed in negative territory, with transportation equipment, marine transportation and equipment-linked stocks comprising the biggest decliners, with falling issues pummeling rising ones by 1,934 to 43.

Trading volume on the main section increased to 3.81 billion shares, up sharply from Tuesday's volume of 1.65 billion shares, and the day's turnover was 3,924.2 billion yen (38.74 billion U.S. dollars). Endit