Roundup: Japan's Nikkei closes at 5-week low on concerns over slowing growth as central banks hike rates

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TOKYO, June 20 (Xinhua) -- Japan's benchmark Nikkei stock index ended at a five-week low on Monday on mounting concerns that the U.S. Federal Reserve's continued aggressive monetary policy will slow economic growth.

The 225-issue Nikkei Stock Average dropped 191.78 points, or 0.74 percent, from Friday to close the day at 25,771.22, marking its lowest closing level since May 12.

The broader Topix index, meanwhile, lost 16.96 points, or 0.92 percent, to finish at 1,818.94.

Local brokers said that despite an early round of buying as investors sought out cheap stocks, the market mood turned circumspect on a lack of fresh trading cues, but mainly over growth concerns if the Fed and other central banks continue hiking their rates.

"The indexes gained earlier in the session because investors sought to buy cheap stocks but the trading activities shrank as they struggled to find market-moving cues," Chihiro Ohta, assistant general manager at the investment research and investor services at SMBC Nikko Securities, was quoted as saying.

"The momentum didn't last long also due to a U.S. market holiday," she said.

But the overriding market influence Monday was ongoing concerns about central banks' rate hikes and the prospects for economic growth, as market strategists explained.

"The Fed has made its hawkish stance clear with its large rate increases, leaving no doubt that a slowdown in the U.S. economy is unavoidable," Masahiro Ichikawa, chief market strategist at Sumitomo Mitsui DS Asset Management Co., was quoted as saying.

By the close of play, mining, oil and coal product, and wholesale trade issues comprised those that declined the most, with issues that fell outpacing those that rose by 1,432 to 363 on the Prime Market, while 43 ended the day unchanged.

Energy stocks led declines after crude oil futures tumbled to their lowest level in around a month during New York trading on Friday due to fears of falling demand as central banks' monetary tightening threatens economic growth.

As a result, oil exploration giant Inpex tumbled 9.4 percent, Idemitsu Kosan fell 7.1 percent, and Eneos Holdings lost 5 percent.

Technology issues lost ground amid concerns over rising interest rates abroad, with Tokyo Electron slumping 5.2 percent, while Shin-Etsu Chemical ended 6.4 percent lower.

Heavy machinery makers also came under pressure, with Mitsubishi Heavy Industries diving 9.2 percent, while Kawasaki Heavy Industries ended the day down 7.7 percent.

Bucking the downward trend, automakers gained traction on the yen's weakness versus the U.S. dollar, with Toyota Motor accelerating 1.3 percent, while Honda Motor advanced 0.6 percent.

Heavily-weighted Nikkei components helped cap losses, with technology investor SoftBank Group Corp. adding 3 percent, while Recruit Holdings ended up 2.4 percent by the close.

On the Prime on Monday, 1,177.84 million shares changed hands, dropping from Friday's volume of 1,869.65 million shares.

The turnover on the first trading day of the week came to 2,716.31 billion yen (20.14 billion U.S. dollars). Enditem

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