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Tokyo Shares Plunge to Fresh Lows
September 12, 2001
Tokyo stocks plunged almost 7% to close at their lowest level in almost 18 years, as investors fear that terrorist strikes at key U.S. financial and political centers will severely damage not only the U.S. but also the global economy and stock markets.
Japan's blue-chip Nikkei 225 average fell 682.85 points, or 6.6%, to close at 9610.10, falling below the 10000 mark first time since August 1984. Tuesday, the index rose 97.26 points, or 1%.
The main Tokyo index marked its eighth-largest percentage-point loss despite technical trading limits and an absence of U.S. investors, as Japanese investment trusts, European investors and individuals rushed to cash in holdings, partly in flight-to-quality moves to government bonds. The dollar was higher against the yen in Asian trading.
In the most devastating terrorist onslaught ever waged against the U.S., hijackers crashed two airliners into the World Trade Center, toppling its twin 110-story towers. Another plane slammed into the Pentagon, and a fourth crashed outside Pittsburgh. Thousands are assumed to be dead.
The falls on the major Japanese stock indices followed Tuesday's 8.5% slide on Germany's DAX 30 Index and the 5.7% decline on the U.K.'s FTSE 100 Index.
On the Tokyo stock exchange, fears of financial-market chaos and its impact on the U.S. and Japanese economies following the terrorist attacks in the U.S. sent Japanese stocks sharply lower.
Even though it was seen as only a matter of time before the Nikkei fell below 10000 points, the turmoil after the terror attacks gave an "urgent incentive" to Wednesday's massive selling, said Hidenori Kawasaki, director of the Equity Department at Kokusai Securities. "Investors are worried about the extent of the damage from the attacks and their impact -- we don't even know when stock trading will resume in New York," Mr. Kawasaki said.
Tokyo's stock market opening was delayed by half an hour in response to the attacks, the Tokyo Stock Exchange said.
Chief Cabinet Secretary Yasuo Fukuda said the government will act promptly to keep financial markets under control. "Keeping close contact with other nations, we'll take proper steps in order to stabilize the financial system," Mr. Fukuda said, urging investors to stay calm. "We would like to ask market participants to respond calmly" to the U.S. attacks."
Share prices are expected to accelerate declines once the U.S. financial system recovers its functions and U.S. investors return to trading, traders said.
The dollar was trading at 119.36 yen early Wednesday, slightly above 118.55 yen late Tuesday in New York.
Highlighting other Asian markets:
- South Korea's main stock index suffered its worst finish in almost three years, reflecting losses in other Asian and European bourses following terrorist attacks in the U.S. The Korea Composite Stock Price Index, or Kospi, dropped 12%, or 64.97 points, to 475.60, its lowest close since ending at 464.90 on Dec. 4, 1998. The market's open was delayed for three hours and then delayed for 20 minutes at the opening after the index plunged 12.2% on panic selling. At the resumption of trade, the market recouped some of its losses but tumbled again by the close. The over-the-counter Kosdaq lost 12%, or 7.16 points, to end at 54.64.
- Hong Kong shares reeled from the impact of devastating terrorist attacks in the U.S. and plunged 923.74 points to close at a new 30-month low Wednesday. It was the index's six largest point-drop since 1970.
Analysts warned Hong Kong shares remain vulnerable in the aftermath of the terrorist attacks - which resulted in the destruction of the World Trade Center in New York and serious damage to the Pentagon in Washington DC - that forced Wall Street to suspend trading overnight.
The blue-chip Hang Seng Index ended down 8.9%, at 9493.62, trading in a range of 9170.24 and 9704.18. Late buying helped the index to regain some ground after it hit an intraday low of 9170.24, its lowest level since Feb. 22, 1999.
- Terrorist attacks on New York's World Trade Center and the Pentagon in Washington reverberated through the Australian share market, wiping 4.1% off the local bourse as investors were left reeling from the horror that has hit the world's largest economy. The benchmark S&P/ASX 200 Index of shares slid 133.5 points to 3108.5, but closed off its intraday low of 3090.2.
- Philippine shares closed sharply lower across the board, mirroring losses suffered by Asian and European markets in the wake of terrorist attacks on the U.S. The 30-company Philippine Stock Exchange Index ended down 52.70 points, or 4.1%, at 1241.39, well below its 1250-point support. Tuesday, the index lost 0.2%.
- New Zealand shares reversed record early lows but still ended dramatically lower. The shock-waves of the attacks reverberated across the trading session and wiped out millions of dollars in stock-value of several companies, which posted record losses during the day.
The tragic events in the U.S. also somewhat overshadowed the financial crisis surrounding Air New Zealand as Qantas Airways said it has decided against buying the assets of Air New Zealand's unit, Ansett Airlines.
The NZSE-40 index dipped 5.8% in morning trade and closed down 91.23 points, or 4.6%, at 1873.47 - the worst points-loss since April 2000 when index tumbled around 97 points.
- Shares on Vietnam's Securities Trading Center, or STC, closed 1.87 points, or 0.65%, lower at 284.68 points in normal trade as investors weren't affected by the terrorist attacks in the U.S., traders said. They noted that because most investors are Vietnamese and the market is isolated, trading was calm here.
-- Guy Daley (firstname.lastname@example.org), September 13, 2001