Panic trading spurred by a widening criminal investigation of a popular Internet startup forced the Tokyo Stock Exchange to shut down 20 minutes early Wednesday as share prices plunged for a second day.These things have a nasty way of spreading as investors tend to have a herd mentality, and when one gets spooked, they all try and run off the cliff. It may get ugly for a little while.
It was the first time trading had to end early because the market's computers couldn't handle a surge of transactions.
The benchmark for the Tokyo Stock Exchange plunged 2.9 percent Wednesday. The Nikkei 225 index dropped 464.77 points to close at 15,341.18 points, its biggest one-day drop since May 10, 2004.
Share prices extended losses from Tuesday, when the Nikkei fell 2.8 percent, following Japanese newspaper reports that the investigation into Livedoor that had started Monday was expanding. The index has fallen nearly 6 percent the last two days.
"Individual and foreign investors are selling in a panic," said Satoru Otsuka, senior economist at Mizuho Research Institute in Tokyo. "The problem is that we have no idea how the Livedoor problem will unfold."
Wednesday, January 18, 2006
Japanese Stock Markets in Turmoil
A high flying internet start-up is crashing and taking the Japanese stock markets with it:
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