FYI
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Stocks: Close 1H At 12 Year Low; Public Funds Don't Appear
TOKYO (Dow Jones)-The Nikkei average closed at its lowest level in over 12 years Wednesday, after a widely-expected injection of public funds to shore up the market on the last day of the fiscal half failed to materialize.
The Nikkei average of 225 selected issues tumbled 415.04 points, or 3.0%, to 13,406.39 - its lowest closing level since February 1986. On Tuesday, the average fell 87.94 points.
The market opened higher on hopes that the government, via public fund buying, would push share prices higher to help the balance sheets of companies as they close their books for the fiscal half on Wednesday.
But when the public fund buying didn't materialize, prices dropped sharply in the last 30 minutes of trade.
"Players had been expecting that public fund buying would support the market, but when that didn't happen they had to cut their losses," said Hideyuki Okoshi, a manager at Chuo Securities.
"Everybody panicked," said Louis Tseng, head of derivatives at Jardine Fleming Securities, who added that the market remains vulnerable to a further drop.
Since the close of the latest fiscal year on March 31, the benchmark average has fallen 19%. The market gauge finished last fiscal year at 16,527.17 and ended the 1997 trading year at 15,258.22.
"At this level, Japanese corporate earnings will suffer" because the value of stock portfolios will be down sharply, said Masaru Arai, general manager of Ryoko Securities.
The near-term December Nikkei futures contract ended down 420 points at 13,350.
Volume on the First Section of the Tokyo Stock Exchange was estimated at 565 million shares, up from 391.44 million shares Tuesday. |
