TOKYO, Oct. 5 (Xinhua) -- With both Nikkei and Topix indexes logging their seventh consecutive day of loss, Tokyo stocks fell sharply on Tuesday, as surging oil prices raised worries over the global economic recovery, and a possible income tax hike proposed by newly elected Japanese Prime Minister Fumio Kishida dragged down market sentiment.
The 225-issue Nikkei Stock Average finished 622.77 points, or 2.19 percent, lower from Monday at 27,822.12, its lowest closing level since Aug. 30.
The broader Topix index of all First Section issues on the Tokyo Stock Exchange closed 26.17 points, or 1.33 percent, lower at 1,947.75.
Trading volume on the main section increased to 1,511.32 million shares from Monday's 1,324.33 million shares.
Tokyo stocks opened low in the morning and moved in negative territory throughout the day. Brokers said that due to fears that higher oil prices might threaten corporate profits and reduce the pace of the global economic recovery, the stock market lost ground for seven consecutive days for the first time since early May 2019.
The benchmark West Texas Intermediate crude futures closed at 77.62 U.S. dollars per barrel overnight, the highest finish since November 2014. In addition, the Middle East crude oil futures at the Tokyo Commodity Exchange briefly jumped to the highest level since Oct. 24, 2018.
The Organization of the Petroleum Exporting Countries and its allies including Russia on Monday agreed in a ministerial meeting to continue with existing plans for increased output. However, their plans seemed not satisfied for the consumer countries amid a tight market.
Maki Sawada, a strategist at Nomura Securities Co.'s investment content department, said, "Share prices fell as the oil price jump came at a time when investors were already wary about a slowdown in an economic recovery and inflation due to supply shortages," adding that investors were closely watching for any developments in other negative factors.
Sawada also said that market participants were waiting to see the support rate for Kishida's Cabinet in order to evaluate the outcome of the general election taking place on Oct. 31.
Masahiro Ichikawa, chief market strategist at Sumitomo Mitsui DS Asset Management Co. said that a possible tax hike by the Kishida government might be a reason for the losses. The current flat rate of 20 percent has often been criticized for unfairly favoring the rich.
Kishida said Monday during his inaugural press conference as prime minister that he would review the taxation of income from financial and securities transactions.
Precision instruments, machinery, and information and communication companies headed Tuesday's declining trend. By the close of play, declining issues outnumbered advancing ones 1,843 to 288 on the First Section, while 52 finished unchanged.
Due to increasing concerns over energy cost, some delivery companies performed weakly, with Hitachi Transport System losing 1.4 percent and Seino Holdings ending 0.9 percent lower.
Fast Retailing, the operator of the Uniqlo casual clothing chain, dropping 6.9 percent after it disclosed Monday that the domestic sales for September decreased from a year earlier because of the sluggish demand for fall clothing due to warmer weather.
After the new trade and industry minister Koichi Hagiuda said that he would promote the restart of nuclear power plants, Tokyo Electric Power Company Holdings jumped 3.0 percent in response, bucking the downward trend. Enditem
