Japan's Nikkei stock index nosedived nearly 11% today as the earthquake-shattered country faced an unfolding nuclear crisis after a radiation leak was detected at a crippled power plant and residents were warned to stay indoors. Other Asian markets also tumbled.
The benchmark Nikkei 225 stock average sank a staggering 10.6% - more than 1,000 points - to close at 8,605.15 after hitting a midday low of 8,227.63 points, more than 14% down. The broader Topix, meanwhile, lost 8%.
The Nikkei's losses followed a 6% tumble yesterday - the first trading day since a devastating earthquake and tsunami struck the north-eastern coast, washing away towns and likely killing more than 10,000 people.
The two days' losses have sent the Nikkei spiralling 20% downwards since the beginning of the year.
Other Asian markets were sharply down because large Japanese investors such as insurance companies and hedge funds pulled money from overseas and repatriated it ahead of the mammoth job of rebuilding, according to Tom Kaan, head of equity sales at Louis Capital Markets in Hong Kong.
Investors felt the biggest shock waves when Japan's Prime Minister Naoto Kan announced that radioactive material had leaked from the Fukushima Dai-ichi nuclear plant in Fukushima province and that more leaks were possible.
"There is also fear of contamination. We've never had three nuclear power plants blowing up one after the other," Mr Kaan said.
"When you have a situation like that, everyone takes to the extreme of being conservative. How far will it affect the air that we breathe and how far the contamination will go? Is it going to reach Korea or China? That's anyone's guess."
Mr Kaan said the Middle East crisis was still far from over and had the potential to further damage markets, oil prices, and the global economic recovery - especially if the political turmoil and violence which has hit countries like Egypt and Libya spreads to oil powerhouse Saudi Arabia.
The stock sell-off in Tokyo hit nearly every business sector, with electric companies under intense pressure again. The Tokyo Electric Power Co, which operates the crippled nuclear plant, crashed 24.7%. Toshiba, a maker of nuclear power plants, sagged 19.5%.
Other companies with nuclear power-related businesses faced a second day of free-falling losses. Mitsubishi Heavy Industries tumbled 10.9%, Kobe Steel dived 12.1%, and Hitachi shed 12.6%. Cosmo Oil, whose refinery caught fire after the quake, slid by 9%.
Car makers declined partly because quake-stricken north-eastern Japan is a major centre for auto production, complete with a myriad of parts suppliers and a network of roads and ports for efficient distribution.
Toyota said it would suspend manufacturing at its domestic plants until tomorrow - a production loss of 40,000 cars. Other manufacturers like Sony and Honda were also forced to halt production. Damage to roads and distribution system made it all but impossible to move products.
Toyota, the world's largest car maker, fell 7.4%. Honda lost 3.9% and Nissan dropped 3.3%. Mitsubishi lost 9.3% and truck-maker Isuzu plunged 9.2%.
Hi-tech suppliers like Elpida Memory, the world's number three maker of computer memory chips and a leading manufacturer of Dram (dynamic random access memory) slid 9.7%.
Ports were closed, steel plants stopped producing, and the country was being urged to conserve power. With manufacturing all but paralysed, exporters were also hammered - Panasonic was down 11.2%, Sharp slid 8.5%, and Sony lost 8.9%.
Fears about the safety of nuclear power weighed on the shares of companies involved in uranium mining. Energy Resources of Australia, one of the world's largest uranium producers, fell 14.3% in Sydney.
Even the rare stocks which did well yesterday -industrial and materials companies, which gained due to expectations that they would benefit when Japan rebuilds - tumbled today.
Japanese construction company Kajima dropped 13.1% and Nishimatsu Construction skidded 23.5%. Analysts said that while the Japanese economy remained virtually shut down, companies in China and elsewhere could fill the void.
Elsewhere in Asia, South Korea's Kospi was down 2.4% to 1,923.92, and Australia's S&P/ASX 200 fell 2.1% to 4,528.70. Hong Kong's Hang Seng index slumped 3.3% to 22,568.28, and mainland China's Shanghai Composite Index lost 2% to 2,879.09.
On Wall Street yesterday, concerns over the economic impact of the earthquake and tsunami in Japan led to a broad sell-off. The Dow Jones industrial average lost 51.24, or 0.4%, to 11,993.16.
The broader S&P index fell 7.89 points, or 0.6%, to 1,296.39. Nine out of the 10 sectors that make up the Standard and Poor's 500 index lost ground. Utilities companies fell 1.4%, the most of any group.
The Nasdaq composite dipped 14.64, or 0.5%, to 2,700.97.
Benchmark crude for April delivery dropped 1.99 dollars to 99.20 dollars a barrel in electronic trading on the New York Mercantile exchange. The contract added 3 cents to settle at 101.19 dollars yesterday.
The dollar was worth 81.79 Japanese yen today, down from 81.88 yen late on Friday. A major natural disaster like an earthquake can bolster the yen because investors expect the Japanese public and insurance companies to buy back their home currency in order to fund the country's reconstruction, increasing demand for the yen.
The euro fell to 1.3940 dollars from 1.3995 dollars.Reuse content