Japanese stocks tumbled the most in two years after the nation’s strongest earthquake on record snarled production lines and shut down factories, raising concern economic growth will stall. Orders to sell overwhelmed the Tokyo Stock Exchange, leaving many shares untraded at the open.
Tokyo Electric Power Co., Asia’s biggest power company battling to avoid a meltdown at its Fukushima nuclear plant, was untraded and set to tumble 23 percent. Tokio Marine Holdings Inc., the nation’s largest property and casualty insurer by market value was set to fall 20 percent. Toyota Motor Corp., Honda Motor Co. and Nissan Motor Co. retreated at least 5 percent after Japan’s three-largest carmakers said thousands of new vehicles were damaged. Canon Inc., the No. 1 camera maker, plunged 9.1 percent.
The Nikkei 225 Stock Average fell 4.7 percent to 9,771.07 as of 9:49 a.m. in Tokyo, set for the biggest drop since January 2009. The broader Topix index declined 6.6 percent to 855.32, the most since October 2008.
“There should be an impact on companies’ production and logistics, just as the Great Hanshin Earthquake did, and there’s no doubt Japan’s economic indicators will worsen temporarily,” said Toshio Sumitani, a strategist at Tokai Tokyo Research Center, referring to a temblor that struck the city of Kobe in 1995.
Trading of Topix index futures on the Tokyo Stock Exchange was halted for 15 minutes starting 9:04 a.m. local time today. The circuit breaker was implemented after a plunge of more than 75 points, spokeswoman Yukari Hozumi said by phone today.
The 8.9-magnitude temblor and subsequent tsunami may have killed 10,000 people in Miyagi prefecture north of Tokyo, national broadcaster NHK reported, citing local police. The official toll reached 977, with 739 more missing and 1,683 injured, the National Police Agency said.
Radiation levels around the Tokyo Electric Power Co. station in Fukushima, 135 miles north of the capital, rose after cooling systems at a second reactor failed, heightening concerns about a possible meltdown following an explosion there March 12. Water levels fell at a third reactor, raising the possibility of a hydrogen explosion, Japan’s top government spokesman said.
Tokyo Electric Power will start service outages in parts of the greater Tokyo area Monday, according to a statement. The biggest supplier of electricity in the capital will divide its service area into five groups, each with three-hour outages from 6:20 a.m. to 10 p.m. The company’s shares were untraded.
The Topix increased 1.9 percent this year through March 11, compared with a gain of 3.7 percent by the S&P 500 and a drop of 0.1 percent by the Stoxx Europe 600 Index. Stocks in the Japanese benchmark are valued at 15.4 times estimated earnings on average, compared with 13.5 times for the S&P 500 and 11 times for the Stoxx 600.
The yen appreciated to 80.62 against the dollar, compared with 82.90 at the close of stock trading in Tokyo on March 11. Against the euro, Japan’s currency strengthened to as much as 112.51 from 114.61. A stronger yen reduces income at Japanese companies when overseas revenue is converted into their home currency.
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