Nikkei index falls sharply after US plunge
AP - 1 hour 44 minutes ago
TOKYO - Japan's Nikkei stock index tumbled more than 4 percent Tuesday morning as sentiment turned downbeat on big losses on Wall Street amid growing gloom over the global economy.
The benchmark Nikkei 225 stock average dropped 385.53 points, or 4.59 percent, to close the morning session at 8,011.69. At one point, the key stock index lost nearly 6 percent. The broader Topix index fell 3.71 percent to 796.81.
Sentiment in Tokyo was sluggish after the Dow Jones industrial average plummeted nearly 8 percent Monday with a litany of bad economic indicators confirming that the U.S. economy is in recession.
"A string of weak economic data really depressed sentiment," Yutaka Miura, a senior strategist at Shinko Securities Co. Ltd.
"With the U.S. economy in a recession, investors were becoming more pessimistic over the state of the global economy," Miura said.
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.
Apart from fears over a prolonged global downturn, the Nikkei index fell sharply on heavy selling of exporters on recent gains in the yen, which hurts exporters' overseas earnings. The yen stood at 93.73 to the dollar in late morning Tokyo trade Tuesday, compared with 93.18 yen in New York late Monday.
Japan's top automaker, Toyota Motor Corp., lost 3.6 percent to 2,840 yen.
Sony Corp. fell 2.7 percent to 1,786 yen and its rival Panasonic Corp. shed 5 percent to 1,091 yen.
Japanese financial giant Mizuho Financial Group Inc. dropped 7 percent to 231,700 yen.
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