Tokyo stocks down at close as China stock rout weighs

Tokyo stocks slipped Tuesday as Chinese markets fell for a second day after the mainland market's heaviest one-session loss in more than eight years.

The Nikkei 225 index at the Tokyo Stock Exchange, which lost almost 1.0 percent at the open, closed 0.10 percent, or 21.21 points, lower at 20,328.89.

The broader Topix index of all first-section shares eased 0.52 percent, or 8.44 points, to 1,629.46.

Shanghai's benchmark index gyrated heavily through the day, falling as much as 5.0 percent and rising almost one percent into positive territory.

Global equity markets retreated on Monday after Shanghai plummeted 8.48 percent partly on fears the Chinese government will pull back on support measures that have provided stability for the past few weeks.

On Wall Street, the Dow shed 0.73 percent, S&P 500 fell 0.58 percent and the Nasdaq lost 0.94 percent.

"The huge declines in Chinese share prices caused market sentiment to wither and triggered risk-off (sentiment) on a global scale," said Toshihiko Matsuno, chief strategist at SMBC Friend Securities.

Analysts said the latest gyrations in China could affect Federal Reserve policymakers' views when they discuss when to hike interest rates during their latest meeting this week.

"The return of market volatility in China will be a significant discussion point at the US Fed. There is a lot of global weakness and significant external risk," said Matthew Sherwood, Sydney-based head of investment strategy at Perpetual Ltd.

Japan's latest earnings season kicks off this week with Japan Airlines, Sony, Canon and Panasonic among the firms reporting.

In Tokyo, Sony shares slipped 0.88 percent to finish at 3,600 yen, Toyota fell 1.29 percent to 8,077 yen, while market heavyweight Fast Retailing, operator for the Uniqlo clothing chain, was up 1.89 percent to 59,370 yen.

Suntory Beverage & Food was down 0.93 percent to 5,280 yen following a report that its parent, Suntory Holdings, was considering a public listing as early as 2018.

Factory robotics giant Fanuc was down 0.81 percent to 23,170 yen. After markets closed, the company chopped its full-year net income forecast by 17 percent to 159.5 billion yen.

On currency markets, the dollar rose to 123.51 yen, from 123.24 yen in New York.

-- Bloomberg News contributed to this story.--

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