Nuclear crisis fears batter stocks in Japan
Monday, March 14, 2011
BANGKOK (AP) — Japanese shares were battered for a second day Tuesday as investors unloaded assets on escalating fears of a nuclear crisis spawned by a mammoth earthquake and tsunami that struck Japan's coast last week. Other Asian markets — sharply down — appeared to be suffering from a ripple effect.
The benchmark Nikkei 225 stock average shed 620.76 points, or 6.5 percent, at 8,999.73 in early trading Tuesday, extending losses from the previous day. The broader Topix lost 6.4 percent. The Nikkei had tumbled more than 6 percent Monday on the first trading day since the devastating earthquake and tsunami struck the northeastern coast Friday, washing away towns and killing thousands of people.
Oil prices fell to near $99 a barrel in Asia after radiation began leaking from a Japanese nuclear plant that was heavily damaged in the 9.0-magnitude quake.
The stock sell-off hit nearly every business sector, with electric companies under intense pressure again. The Tokyo Electric Power Co., which operates the crippled nuclear plant, was overwhelmed with sell orders and had yet to trade. Toshiba Corp., a maker of nuclear power plants, was also untraded.
Other companies with nuclear power-related businesses faced a second day of heavy losses, including Hitachi Ltd., falling 7.8 percent; Mitsubishi Heavy Industries, down 9 percent; and Kobe Steel Ltd., down 9 percent.
Cosmo Oil, whose refinery caught fire after the quake, slid by 8 percent.
Car makers declined partly because quake-stricken northeastern Japan is a major center for auto production, complete with a myriad of parts suppliers and a network of roads and ports for efficient distribution.
Major vehicle manufactures halted production after the quake, and their shares continued to capsize. Toyota Motor Corp., the world's largest automaker, fell 4.7 percent; Honda lost 4.4 percent; and Nissan dropped 5 percent. Mitsubishi Motors Corp. lost 6.2 percent and truck-maker Isuzu Motors Ltd. plunged 8.6 percent.
Fears about the safety of nuclear power weighed on the shares of companies involved in uranium mining. Energy Resources of Australia Ltd., one of the world's largest uranium producers, fell 6.6 percent.
Even the rare stock that did well Monday — industrial and materials companies, which gained due to expectations that they would benefit when Japan rebuilds — tumbled Tuesday. Japanese construction company Kajima Corp. dropped 6 percent and Nishimatsu Construction Co. Ltd. skidded 13 percent. Analysts said that while the Japanese economy remained virtually shut down, companies in China and elsewhere could fill the void.
Throughout Asia, investors fled stocks as the crisis in the world's No. 3 economy seemed only to escalate. South Korea's Kospi was down 2.5 percent to 1,921.34, and Australia's S&P/ASX 200 fell 2.3 percent to 4,521.70.
Hong Kong's Hang Seng index slumped 3.8 percent to 22,469.22, and mainland China's Shanghai Composite Index lost 2.7 percent to 2,856.98.
On Wall Street Monday, concerns over the economic impact of the earthquake and tsunami in Japan led to a broad sell-off. The Dow Jones industrial average lost 51.24, or 0.4 percent, to 11,993.16.
The broader S&P index fell 7.89 points, or 0.6 percent, to 1,296.39. Nine out of the 10 sectors that make up the Standard and Poor's 500 index lost ground. Utilities companies fell 1.4 percent, the most of any group.
The Nasdaq composite dipped 14.64, or 0.5 percent, to 2,700.97.
Benchmark crude for April delivery dropped $1.90 to $99.29 a barrel on the New York Mercantile exchange. The contract added 3 cents to settle at $101.19 on Monday on the Nymex.
The dollar was worth 81.66 Japanese yen Tuesday, down from 81.88 yen late Friday. Major natural disasters like earthquakes tends to bolster the yen because investors expect the Japanese public and insurance companies to buy back their home currency in order to fund the country's reconstruction, increasing demand for the yen.
More like this story
Use the comment form below to begin a discussion about this content.
Please review our Policies and Procedures before registering or commenting