Nikkei index tumbles after U.S. plunge

Tuesday 02nd December, 04:22 PM JST

TOKYO —

Japan’s Nikkei index tumbled more than 6% Tuesday as selling spread across the board on big losses on Wall Street amid growing gloom over the global economy.

The benchmark Nikkei 225 stock average lost 533.53 points, or 6.35%, to close at 7,863.69. The broader Topix index fell 4.88% to 787.12.

Sentiment in Tokyo turned sluggish after the Dow Jones industrial average plummeted nearly 8% Monday with a litany of bad economic indicators.

“A string of weak economic data really depressed sentiment,” Yutaka Miura, a senior strategist at Shinko Securities Co. “Investors are becoming more pessimistic over the state of the global economy.”

In New York on Monday, selling spread across the board on Wall Street as a gauge of U.S. manufacturing activity in November fell to a 26-year low following similarly weak readings in Europe and China, fueling fears over a deepening global downturn.

The poor November report came the same day that the National Bureau of Economic Research, a private group, said the U.S. economy, the world’s largest, has been in a recession since December 2007.

Kazuhiro Takahashi, an equity strategist at Daiwa Securities SMBC Co, said the Nikkei index was under heavy selling pressure as investors were bracing for a weak November employment report due out on Friday.

“It will be yet another sign confirming the U.S. economic deterioration. Investors are simply unable to find any positive leads right now,” Takahashi said.

Apart from fears over a prolonged global downturn, the Nikkei index plummeted on heavy selling of exporters on recent gains in the yen, which erodes overseas earnings. The dollar was little changed at 93.16 yen in late afternoon Tokyo trade.

Japan’s top automaker, Toyota Motor Corp, tumbled 4.1% to 2,825 yen. Honda Motor Corp dropped 6.9% to 1,886 yen.

Sony Corp fell 4.6% to 1,751 yen and its rival Panasonic Corp shed 3.3% to 1,111 yen.

Japanese financial giant Mizuho Financial Group Inc plunged 8.4% to 228,300 yen.

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3 Comments

30061015 at 12:20 AM JST - 3rd December

"growing gloom..." The new concept of economic growth.

Yes, I'll take two orders of global gloom to go...and..would you supersize it please?
rajakumar at 02:18 AM JST - 3rd December

After the GLOOM there is BOOM, GLOOM is there because we are human and imperfect.

BOOM will supersize when we solve the and correct the mistakes made in the Global Finance systems and USA finance systems.

Never has the world been richer than today, that is year 2008 despite GLOOM.
ca1ic0cat at 04:11 AM JST - 3rd December

Ever feel like you're riding a yo-yo? I'm not convinced we're at the bottom yet.

I agree that the world in general is richer but the US has been living on credit for so long that it would seem they can't pay the bills. That is going to stuff everything.