Construction stocks fell on the Tokyo Stock Exchange on the 19th. The Nikkei sector index fell about 3%, updating its year-to-date low. Selling pressure spread amid surging materials prices caused by globally rising interest rates and turmoil in the Middle East.
Construction stocks fell on the Tokyo Stock Exchange on the 19th, with the Nikkei construction-sector index down approximately 3% from the previous day. As a result, the construction sector hit a year-to-date low. Rising interest rates, which have driven up materials prices, and turmoil in the Middle East appear to have acted as headwinds.
Among major construction companies, Taisei Corporation temporarily fell ¥610, or approximately 4.8%, from the previous day to ¥12,085, setting a new year-to-date low. Kandenko Corporation closed down approximately 6%, while Kinden Corporation also fell approximately 4%, with some subcontractors also sold off.
Persistently high materials prices were cited as a factor, and there are also concerns about a slowdown in construction demand. Some observers have pointed out that higher funding costs resulting from rising interest rates and higher raw-material costs are weighing heavily on earnings outlooks across the construction industry.
Market participants said they would closely monitor how future interest-rate movements and developments in the Middle East affect both the supply and demand sides of construction materials.