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The FTSE 100 opened down around 9 points at 5819.68. French stocks slid 0.4pc but German markets dropped 1.4pc with shares in giant reinsurers and nuclear groups hard hit.
Shares in Hong Kong, mainland China, Korea and India all rose despite concerns about the economic impact of the disaster on the fragile global recovery. Japan accounts for more than 7pc of the world economy, so any major disruptions to its output are felt all over the planet.
Tokyo's Nikkei 225 index dived 633.94 points to close at 9,620.49. Brent crude prices also dropped close to $111 on expectations of lower demand from the world's third-largest economy.
Worries about the economic impact of Friday's disaster, including massive power shortages that could disrupt factories, triggered a broad sell-off that hit all sectors. The broader Topix index was down 7.49pc.
Tokyo Electric Power fell 24pc as it struggled with malfunctioning nuclear reactors and a power shortage that led the company to announce rolling blackouts in parts of Tokyo and its suburbs.
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Companies with nuclear power-related businesses such as those that build nuclear power plants, registered big losses, including Hitachi, down 16.2pc, and Toshiba, down 16.3pc. Japan Steel dropped 19pc, Mitsubishi Heavy Industries 10pc and Kobe Steel 7.3pc.
Stocks in other sectors also took major hits as investors dumped shares over concerns about economic production and consumption. Car makers slid as northeastern Japan is a major center for auto production, complete with a myriad of parts suppliers and a network of roads and ports for efficient distribution.
Toyota, the world's top carmaker, Nissan, and Honda suspended production at all plants across Japan. Toyota was down 8.6pc, Honda lost 7.7pc, and Nissan dropped 10.7pc. Mitsubishi Motors and Isuzu Motors both lost nearly 11pc.
Insurance companies — many of which will likely face heavy claims for lost property and infrastructure — also suffered sharp drops, including Tokio Marine Holdings which was down 13pc. Cosmo Oil, whose refinery has been on fire since the 8.9-magnitude quake, dived 25.2pc.
British insurance firms which do business in Japan were the hardest hit with estimated of estimates of the scale of potential claims more than tripling over the weekend to $30bn-$50bn (£19bn-£30bn) as the scale of the crisis unfolded.
Lloyd's of London insurers Caitlin and Amlin fell 4.12pc and 2.18pc respectively on Monday.
Burberry the luxury goods retailer was another big faller, down 4.26pc - Japan is one of the world's biggest consumers of luxury goods.
Economists warned yesterday that up to 2pc could be wiped off the value of stocks and shares in London, which would equate to a £30 billion drop in the value of the FTSE 100 index.
Prof Douglas McWilliams, the founder of the Centre for Economic and Business Research, said: “It’s still an evolving situation in Japan but what we do know is that they’ve shut down a lot of production.
“The Kobe earthquake in 1995 hit Japan’s GDP by about two per cent and I would have thought this could be bigger than that.
“In this country, insurers are the ones in the direct firing line, because a proportion of the cost of the disaster, which is likely to be in the fifties of billions, will come through the UK.
“We are in a fairly fragile situation in terms of our own economy. The financial markets are very nervous and all sorts of things could trigger concerns. The activity in informal trading over the weekend suggests there could be a two per cent fall in the markets on Monday.”
Japan was already trying to overcome the world’s biggest deficit before the tsunami devastated the north of the country on Friday. It had slipped to third, behind China, in the list of the world’s biggest economies.
Masaaki Shirakawa, the governor of the Bank of Japan, said the central bank would provide “massive” liquidity to maintain financial stability. Earlier on Monday, the Bank of Japan injected a record 15 trillion yen (£115bn) into money markets to try to defend the already fragile economy.
Some economists gave less gloomy predictions of the impact on Japan’s economy.
Rob Carnell, an analyst at ING Financial Markets, predicted that the tsunami would have a less profound effect than the 1995 Kobe earthquake but added: “One potential fly in the ointment is that in 1995, although seriously challenged, Japan’s fiscal situation was not in such a parlous state as it is today.”
Http://www.telegraph.co.uk/finance/markets/8380108/London-stock-market-holds-nerve-as-Nikkei-dives.html
Shares in Hong Kong, mainland China, Korea and India all rose despite concerns about the economic impact of the disaster on the fragile global recovery. Japan accounts for more than 7pc of the world economy, so any major disruptions to its output are felt all over the planet.
Tokyo's Nikkei 225 index dived 633.94 points to close at 9,620.49. Brent crude prices also dropped close to $111 on expectations of lower demand from the world's third-largest economy.
Worries about the economic impact of Friday's disaster, including massive power shortages that could disrupt factories, triggered a broad sell-off that hit all sectors. The broader Topix index was down 7.49pc.
Tokyo Electric Power fell 24pc as it struggled with malfunctioning nuclear reactors and a power shortage that led the company to announce rolling blackouts in parts of Tokyo and its suburbs.
RELATED ARTICLES
Nikkei dives as world counts cost of devastation 14 Mar 2011
London markets poised for sell-off after earthquake in Japan 14 Mar 2011
Japan shuts down as economic fears grow after earthquake 12 Mar 2011
Japan earthquake starts tremors on the FTSE 100 12 Mar 2011
Japan will bounce back from this terrible disaster 11 Mar 2011
Fears of worse nuclear reactor accident prevail in Tokyo 12 Mar 2011
Companies with nuclear power-related businesses such as those that build nuclear power plants, registered big losses, including Hitachi, down 16.2pc, and Toshiba, down 16.3pc. Japan Steel dropped 19pc, Mitsubishi Heavy Industries 10pc and Kobe Steel 7.3pc.
Stocks in other sectors also took major hits as investors dumped shares over concerns about economic production and consumption. Car makers slid as northeastern Japan is a major center for auto production, complete with a myriad of parts suppliers and a network of roads and ports for efficient distribution.
Toyota, the world's top carmaker, Nissan, and Honda suspended production at all plants across Japan. Toyota was down 8.6pc, Honda lost 7.7pc, and Nissan dropped 10.7pc. Mitsubishi Motors and Isuzu Motors both lost nearly 11pc.
Insurance companies — many of which will likely face heavy claims for lost property and infrastructure — also suffered sharp drops, including Tokio Marine Holdings which was down 13pc. Cosmo Oil, whose refinery has been on fire since the 8.9-magnitude quake, dived 25.2pc.
British insurance firms which do business in Japan were the hardest hit with estimated of estimates of the scale of potential claims more than tripling over the weekend to $30bn-$50bn (£19bn-£30bn) as the scale of the crisis unfolded.
Lloyd's of London insurers Caitlin and Amlin fell 4.12pc and 2.18pc respectively on Monday.
Burberry the luxury goods retailer was another big faller, down 4.26pc - Japan is one of the world's biggest consumers of luxury goods.
Economists warned yesterday that up to 2pc could be wiped off the value of stocks and shares in London, which would equate to a £30 billion drop in the value of the FTSE 100 index.
Prof Douglas McWilliams, the founder of the Centre for Economic and Business Research, said: “It’s still an evolving situation in Japan but what we do know is that they’ve shut down a lot of production.
“The Kobe earthquake in 1995 hit Japan’s GDP by about two per cent and I would have thought this could be bigger than that.
“In this country, insurers are the ones in the direct firing line, because a proportion of the cost of the disaster, which is likely to be in the fifties of billions, will come through the UK.
“We are in a fairly fragile situation in terms of our own economy. The financial markets are very nervous and all sorts of things could trigger concerns. The activity in informal trading over the weekend suggests there could be a two per cent fall in the markets on Monday.”
Japan was already trying to overcome the world’s biggest deficit before the tsunami devastated the north of the country on Friday. It had slipped to third, behind China, in the list of the world’s biggest economies.
Masaaki Shirakawa, the governor of the Bank of Japan, said the central bank would provide “massive” liquidity to maintain financial stability. Earlier on Monday, the Bank of Japan injected a record 15 trillion yen (£115bn) into money markets to try to defend the already fragile economy.
Some economists gave less gloomy predictions of the impact on Japan’s economy.
Rob Carnell, an analyst at ING Financial Markets, predicted that the tsunami would have a less profound effect than the 1995 Kobe earthquake but added: “One potential fly in the ointment is that in 1995, although seriously challenged, Japan’s fiscal situation was not in such a parlous state as it is today.”
Http://www.telegraph.co.uk/finance/markets/8380108/London-stock-market-holds-nerve-as-Nikkei-dives.html
Last edited by Quibit on Mon Mar 14, 2011 3:58 pm; edited 1 time in total (Reason for editing : Article inserted)
