Tokyo Shares Drop 14%
By BRAD FRISCHKORN
TOKYO—An early decline in Japanese shares picked up speed Tuesday afternoon, with the main index skidding 14.4% as the country's prime minister warned of a high risk of elevated levels of radiation from a reactor at the Fukushima nuclear-power plant after another explosion earlier in the day.
Reuters
Employees of the Tokyo Stock Exchange work at the bourse in Tokyo March 14, 2011.
Bargain hunters were swept aside by the selling with the benchmark Nikkei Stock Average recently at 8257.56, its lowest level since April 2009 and at risk of further weakness as the Nikkei June futures contract continued to drop. The declines were exacerbated by news of a fire at Tokyo Electric Power's No. 4 reactor at the Fukushima Daiichi plant in northeastern Japan and reports that radiation has spiked near the No. 3 reactor. The market was quickly dropping toward key support at 8000 points.
"Substantial amounts of radiation are leaking in the area," Prime Minister Naoto Kan said on television. "We are making utmost efforts to prevent further explosions or the release of radioactive materials."
"All we can do now is just watch these developments at the nuclear power plants," said Yutaka Miura, a senior technical analyst at Mizuho Securities.
Selling turned indiscriminate with the market on course for its worst showing since Oct. 20, 1987, when it fell 14.9%. "It's panic-selling. It's not only foreign investors—everybody just wants to dump shares," said Retela Crea Securities general manager Yosuke Shimizu.
Futures trading will be suspended if the main contract falls to 7780 points; recently it was down 14% at 8160, having briefly fallen below 8000 for the first time since March 2009. The Osaka Securities Exchange triggered circuit breakers several times to temporarily halt trade.
Disaster in Japan
- Japan's Nuclear Crisis Escalates
- Obama Stands by Nuclear Power
- Rescuers Scramble as Death Toll Surges
- A Nation's Vigil of Hope and Loss
- Nuclear Crisis Feeds Regulation Doubts
- Radiation Is Part of the Modern Life
- Firms Assess the Damage From Quake
- Reactor Failures Spark Safety Questions
- Uranium Firms Take Hit
- Opinion: Japan Does Not Face Another Chernobyl
- Heard: Aftershocks for Japan's Power Industry
- Complete Coverage: Japan Quake
Overall trading volume remained heavy at 3.7 billion shares so far on the TSE first section, after record heavy selling saw the market fall 6.2% the prior day.
Unlike on Monday, though, markets in the rest of Asia were dropping as well, with Hong Kong's Hang Seng Index down 3.8% and riskier currencies like the Australian dollar and euro weakening. Dow Jones Industrial Average futures are also lower in screen trade.
Australia's S&P/ASX index was down 3%, the Shanghai Composite was down 2.1%, South Korea's Kospi was down 2.6%, Singapore's Straits Times Index was down 2.6%, Taiwan's Taiex was down 3.7% and India's Sensex was down 1.8%.
"What the world is watching right now is whether Tepco's Fukushima nuclear power plant is going to turn into Chernobyl," said Norihiro Fujito, senior investment strategist at Mitsubishi UFJ Morgan Stanley Securities. "Foreign investors who had been buy(ers of) Japan stocks are now turning to sell."
All 33 subindexes on the Topix were lower, with Tepco, the operator of the stricken nuclear facility in the country's northeast, still being quoted limit-down. Tohoku Electric Power, which also operates nuclear power facilities in Japan, was also limit-down.
Sony shares were down 5.5% as it, among other companies, has called a production halt on some operations in the aftermath of Friday's earthquake and subsequent tsunami.
Even construction stocks—a small bright spot Monday—w ere falling back, with Kajima Corp down 13%. As the nuclear crisis persists there are increased worries about the overall economic hit from the quake.
The Bank of Japan kept up its campaign of pumping cash into money markets Tuesday, injecting a total of eight trillion yen ($97.93 billion) of same-day funds in two separate operations in the morning and afternoon, as it looks to calm financial markets that have been hit hard by concerns over recent disasters.
0 comments:
Post a Comment