LONDON, Jan 18: European stock markets sank on Wednesday after Japanese shares plunged across the board in shortened trading, compounding gloomy earnings news from the United States, dealers said.
The Tokyo stock exchange was forced to shut early for the first time in 57 years on Wednesday amid fallout from a raid by prosecutors on the offices of Internet company Livedoor.
In European trading, London’s FTSE 100 index of leading shares slid 0.95 per cent to 5,644.60 points, in Paris the CAC 40 lost 1.15 per cent to 4,751.97, and Frankfurt’s DAX 30 plunged 1.54 per cent to 5,375.88 points.
The DJ Euro Stoxx 50 index of leading eurozone shares shed 1.41 per cent to 3,559.34 points.
The euro stood at $1.2132.
The situation in Japan is not going to help sentiment, but people are nervous at the start of the corporate earnings season in the US, said Richard Hunter, head of UK equities at Hargreaves Lansdown stockbrokers.
After-hours results late Tuesday from US Internet portal Yahoo and semiconductor giant Intel Corp disappointed investors, dragging the European tech sector down on Wednesday.
Wall Street had skidded lower Tuesday, hurt also by a surge in energy prices linked to concerns over the nuclear crisis with Iran and unrest in Nigeria.
European and Asian stock markets were due a correction after striking recent four-and-a-half and five-year high points respectively, according to Jeremy Batstone, analyst at Charles Stanley.
It is a pullback after a very strong rally in the run-up to Christmas and the first few weeks of 2006, he said.
The Tokyo Stock Exchange announced Wednesday that it stopped accepting any new orders for all listed shares and convertible bonds at 2.40 pm (0540 GMT), 20 minutes before the scheduled close, to avoid an computer failure in view of surging trading volume caused by the Livedoor affair.
The exchange also said it would shorten trading by 30 minutes a day until further notice.
The Nikkei 225 benchmark index finished down 464.77 points or 2.9 per cent at 15,341.18 points, the largest single-day drop since May 10, 2004.
Japan’s had a terrific run over 2005 — the market was up 30-40 per cent in local currency terms — so some kind of correction was likely, Batstone added.
Livedoor’s offices were raided late Monday for suspected illegal securities trading and other wrongdoings.
Hong Kong’s key Hang Seng Index closed down 0.61 per cent at 15,481.21 points, as investors were unnerved by another huge drop in Japan.
Back on Wall Street on Tuesday, the Dow Jones Industrial Average closed down 0.58 per cent to 10,896.32 points while the tech-heavy Nasdaq composite slid 0.62 per cent to 2,302.69.
The broad-market Standard and Poor’s 500 index retreated 0.36 per cent to 1,282.93.
A fresh spike in crude oil prices had left US investors unsettled. New York’s February contract jumped $2.39 to close at $66.31 a barrel on Tuesday, the highest finish since September 29.—AFP