Tokyo stocks closed sharply lower Thursday with the key Nikkei index sinking 3.03 percent.

The benchmark Nikkei 225 Average plunged 240.58 points to 7,705.36.

The broader Topix index shed 17.81 points, or 2.29 percent, to 760.29.

Most sectors on the TSE lost ground, led by insurance, securities and sea transport issues. Shares advanced in only two sectors -- oil and coal product, and land transport.

Value leader Toyota Motor fell 90 yen, or nearly 3 percent, to 3,050 yen while volume leader Toshiba gained 6 yen, or more than 2percent, to 262 yen.

On the First Section, declining issues outnumbered advancing issues 1,222 to 384, with 103 others remaining unchanged.

Trading volume on the main section expanded to 1,921.65 million shares from 1,860.45 million Tuesday.

The TSE's Second Section index dropped 13.13 points, or 0.70 percent, to 1,851.55 on a volume of 29.97 million shares.

On the Osaka Securities Exchange, the near-term March Nikkei 225 index futures contract sank 200 points to 7,750.