Stock Prices Fall Sharply in Morning Session
TOKYO (AP) _ The key index on the Tokyo Stock Exchange plummeted more than 1,300 points at the end of the morning session Tuesday and appeared headed for a third straight day of heavy losses.
Until mid-morning, almost half of the 225 issues on the first section of the Tokyo Stock Exchange were left without prices because no one was interested in buying them, traders said. They said the index could fall further in the afternoon when participants gradually filed sell orders.
″Investors are panicking because their fears are growing as they now realize how serious the situation could be,″ said a trader with Nomura Securities Co. who spoke on condition of anonymity.
The 225-issue Nikkei Stock Average lost 1,327 points, or 4.64 percent, ending the morning session at 27,271.86. The index lost 729.42 points on Friday, and 916.23 points on Monday.
The Nomura trader added the soaring oil prices also fueled investors’ fears of inflation and accelerated the panic selling. In New York, the oil price surpassed $28 per barrel Monday. Oil prices continued to rise in early Asian trading, as October Brent sold at $27.05 per barrel Tuesday morning.
″There were almost no buyers for 40,000 issues offered for sale in initial trading,″ said Yoshihide Koyama, an analyst with Nikko Securities.
Koyama said buyers were staying out of the market because of uncertainty over the Middle East, rising oil prices and Monday’s 93.31-point drop in the Dow Jones average of 30 industrial stocks on the New York Stock Exchange.
In bond dealings, the yield of the benchmark No. 119 10-year Japanese government bonds soared to 8.135 percent from Monday’s close of 7.935 percent. Their price slipped to 82.85 points from 83.71.
The dollar was changing hands at 150.60 yen. It opened at 150.75 yen, up 1.25 yen from Monday’s close of 149.50 yen, and ranged between 150.60 yen and 151.10 yen.
Dealers said the yen was recovering its stability following dollar sales as investors took profits despite the dollar’s strong overnight increase in New York.
″Uncertainty about the Middle East is a factor that encourages dollar buying, but on the other hand, pessimistic prospects over the U.S. economy, which is a dollar-selling factor, is equally strong,″ said Takashi Fujii, a trader with the Bank of Tokyo.
″Right now, investors are watching both factors -- the Middle East situation and the U.S. economy, and the currency could move in either direction, ″ he said.
As part of an international effort to isolate Iraq, Japan is freezing both Iraqi and Kuwaiti assets in Japan and suspending credit in cooperation with international sanctions voted by the United Nations Securities Council, said Japanese Finance Minister Ryutaro Hashimoto.
Hashimoto said the yen will strengthen in aftermath of Iran-Kuwait crisis.