TOKYO, July 18 (Xinhua) -- Tokyo stocks closed sharply lower Thursday as investor sentiment was dented by a weak lead from Wall Street overnight and concerns corporate earnings will be impacted global trade issues.
The 225-issue Nikkei Stock Average dropped 422.94 points, or 1.97 percent, from Wednesday to close the day at 21,046.24, marking it the lowest close since June 18.
The broader Topix index of all First Section issues on the Tokyo Stock Exchange, meanwhile, lost 33.14 points, or 2.11 percent, to finish at 1,534.27.
Investors were in a risk-off mood from the get-go, local brokers said, owing to losses on Wall Street overnight, with shares retreating throughout the day.
A circumspect market mood turned to all-out selling to secure gains amid mounting concerns that global trade issues will affect the bottom lines of major Japanese companies with earnings season set to swing into gear next week, investment strategists said.
"Investors who had been in a wait-and-see mood ahead of the earnings season turned cautious," said Yutaka Miura, a senior technical analyst at Mizuho Securities Co.
Other investment strategists pointed to market players broadly moving to secure profits now, before Japanese firms begin to announce possible downgrades to their full-year earnings starting next week.
"Investors sold shares to secure profits as they are becoming aware of risks concerning downgrading of full-year earnings," Norihiro Fujito, senior investment strategist at Mitsubishi UFJ Morgan Stanley Securities Co., was quoted as saying.
Adding to investor consternation is a growing row between Japan and South Korea over Tokyo's imposition of stricter export controls on high-tech materials bound for South Korea, local traders also said.
Shipping lines sank on concerns for global growth, with Kawasaki Kisen diving 4.0 percent, while Mitsui O.S.K. Lines drooped 2.6 percent by the close.
Canon ended the day 4.0 percent lower after the Nikkei business daily reported its operating profit could tumble by as much as 40 percent this year.
NOK Corp., meanwhile, slumped 6.4 percent, after the manufacturer of sealant products announced it had slashed its earnings outlook owing to weak sales of car-related products in its major North American and Chinese markets.
Following a possible arson attack at an animation studio in Kyoto, western Japan, on Thursday, that may have killed more than 20 people and left scores injured, issues linked to the industry lost ground.
Cinema giant Toho dropped 4.5 percent, while Toei Animation closed 3.2 percent lower. Bandai Namco, meanwhile, ended the day 3.2 percent down.
By the close of play, all industry categories retreated into negative territory, with oil and coal product, mining and marine transportation issues comprising those that declined the most.
Issues that declined outpaced those that advanced by 2,075 to 55 on the First Section, while 20 ended the day unchanged.
On the main section on Thursday, 1,288.72 million shares changed hands, rising from Wednesday's volume of 1,023.95 million shares.
The turnover on the penultimate trading day of the week came to 2,177.7 billion yen (20.21 billion U.S. dollars).