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Nikkei hits 4-year closing low as gloom spreads

Nikkei hits 4-year closing low as gloom spreads
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First Published: Mon, Oct 06 2008. 01 12 PM IST
Updated: Mon, Oct 06 2008. 01 12 PM IST
Tokyo: Japan’s Nikkei stock average sank to a four-and-a-half-year closing low on Monday after briefly dropping 5% as signs of growing global economic gloom spooked investors into dumping shares across the board.
Financial stocks were hit hard, with top bank Mitsubishi UFJ Financial Group losing 9.2%, its biggest one-day loss in percentage terms since October 2003.
Exporters and high-tech shares also dragged the Nikkei lower, with exporters undermined as the safe-haven yen surged. The dollar fell more than 2% at one point to 102.98 yen a four-month low. Especially hard hit were chip-linked stocks, with Tokyo Electron and Advantest Corp the top two drags on the benchmark share average.
“It’s a black Monday,” said Nagayuki Yamagishi, noting that markets were plunging despite Friday’s passage by the US House of Representatives of a $700 billion financial rescue plan.
“The whole global economy is weighing on the market. England’s bad, Germany’s in terrible shape - you can clearly see a global recession emerging.”
The Nikkei shed 465.05 points to 10,473.09, its lowest close since February 2004. It earlier hit an intraday low of 10,374.38 and fell 5%.
The broader Topix lost 4.7% after earlier falling more than 5%, closing at 999.05 in its lowest close since December 2003.
Market attention shifted from concern about whether the US rescue proposal would pass to concern about how it will be carried out, with doubts growing about whether it would help.
“There’s still a sense that the financial crisis really isn’t all over yet, and it’s definitely spilling over into the rest of the economy,” said Takashi Ushio, head of the investment strategy division at Marusan Securities.
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First Published: Mon, Oct 06 2008. 01 12 PM IST
More Topics: Market Crisis | Japan | Nikkei | Stocks | Money Matters |