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October 28, 2008
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Tuesday
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Shawwal 28, 1429
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Tokyo market at record low
LONDON, Oct 27: European stock markets fell heavily on Monday after the Nikkei index in Japan closed at its lowest in 26 years as the financial crisis raised recession fears and drove up the yen, piling the pressure on the country’s exporters.
Tokyo’s Nikkei 225 index closed down 6.4 per cent to 7,162.90 — the lowest since October 1982 — with exporters like Toyota Motor Corp and Sony Corp hit hard. The losses came despite a report that the government was considering massive capital injection into struggling banks in a bid to calm jittery financial markets.
Oil prices fell to their lowest level in more than a year on Monday before rebounding to just above $63 a barrel as growing evidence of a global economic slowdown had investors betting on a further drop in energy demand.
“Worries about the impact of the surging yen on Japanese export earnings have hit the Nikkei hard,” said Julian Jessop, chief international economist at Capital Economics.
“This in turn has led to sharp falls in European markets even when, as on Friday, the US had closed higher the day before,” he added. Benchmarks in Britain, Germany and France trading down more than 4 per cent. The FTSE 100 index was 190.97 points, or 4.9 per cent, lower at 3,693.39, with heavyweight oil stocks BP PLC and Royal Dutch Shell down 5.1 per cent and 4.7 per cent respectively as oil prices continue to plummet despite last week’s decision by the OPEC oil cartel to cut production.
Germany’s DAX was down 200.24 points, or 4.7 per cent, at 4,095.43 despite an 80 per cent rise in the share price of Volkswagen AG following news that Porsche AG wants to increase its stake in the car manufacturer.
France’s CAC-40 was the worst performing European index, down 216.34 points, or 6.8 per cent, at 2,977.45, with car manufacturers heavily sold off after gloomy updates last week. Renault SA shares were 8.7 per cent lower, while Peugeot SA shares were down 7.3 per cent.
Dow futures were down 268 points, or 3.2 per cent, at 7,994. Standard & Poor’s 500 futures were down about 4 per cent.
—AP
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