Japanese nuclear fears spark sell-off in markets
Stocks take a major tumble as investors dump 'risky' assets in flight to safety
Published 16/03/2011 | 05:00
THE president of the Tokyo Stock Exchange appealed for calm after an earthquake and nuclear accident triggered the biggest two-day decline in Japanese stocks since 1987.
Investors and traders should "respond in a calm and orderly manner" exchange president Atsushi Saito said yesterday, after the Nikkei 225 Stock Average plunged 11pc, bringing its loss since yesterday's open to 16pc.
The Nikkei and broader Topix index each fell as much as 14pc, the biggest intraday retreats since the October 1987 stock market crash.
Gold prices dropped to a one-month low yesterday, but were well off their lows, as fear of a potential nuclear catastrophe in Japan sent world financial markets tumbling in a flight to safety.
Bullion was caught in a global equity rout that wiped out about $650bn (e460bn) in valuations as investors dumped assets considered risky and sought the safety of cash or government debt.
US stocks escaped the brunt of a global sell-off that sent Tokyo shares to their worst two-day drop since 1987, paring losses as Japanese officials made progress in stabilising damaged nuclear reactors and the Federal Reserve said the economy is improving. The Standard & Poor's 500 Index fell 1.1pc in late trading after rebounding from a 2.7pc slump, even as the MSCI All-Country World Index of shares in 45 nations lost 2.2pc. The benchmark measure of US equities sank to its low of the day six minutes after trading began. Raw-material, energy and industrial shares in the S&P 500 rose more than 2.2pc.
"The more positive tone of the Fed brought some relief especially on a jittery day like this one," said Richard Sichel, who oversees $1.5bn as chief investment officer at Philadelphia Trust.
Platinum group metals also fell sharply as Japan's deepening nuclear crisis dampened demand expectations due to plant closures and production outages in the country's auto industry.
Silver tumbled as much as 6pc to a low of $33.56 an ounce. Other safe havens, such as US Treasuries and the Swiss franc, rallied after Japanese stocks posted their worst two-day slide since 1987. (Reuters)