Stock Prices Drop in Reaction to Dow Jones Plunge
TOKYO (AP) _ Tokyo stock prices dropped about 700 points Monday following a 120-point drop Friday in New York. The dollar was also down.
The 225-issue Nikkei Stock Average closed at 23,400.12, down 699.06 points, or 2.90 percent.
The index fell 568.55 points in the last three days of last week, leaving less room to fall in reaction to the Dow.
Traders said the Nikkei was down in a sympathy reaction and would not likely drop much further.
″It’s a knee-jerk reaction,″ said Mike Morizumi, a trader with Lehman Brothers. ″The reasons the Dow fell are isolated to the New York market and will have little effect on Tokyo.″
″I don’t think the Nikkei will go much lower than its current level,″ said Simon Marrie of Yamaichi Securities. ″It’s likely to be supported by foreign investors.″
Takeshi Tanikawa, managing director of Daiwa International Capital Management Co., said Friday’s plunge in New York ″came when the New York market was challenging new highs. ... It was overheated.″
″The Nikkei is being strongly influenced by the Dow,″ said Kazuyuki Suzuki of Daiwa Securities, who had predicted the Nikkei would drop 1,000 points by the end of the day’s trading.
The Tokyo Stock Price Index of all issues listed on the first section stood at 1,773.13 points, down 39.04 points, or 2.2 percent, from Friday.
The Australian stock market was down 26.1 points at noon (8 p.m. EST Sunday) to 1650.8. It opened down 42 points, or 2.47 percent.
The dollar closed at 128.93 yen, down 0.84 yen from Friday’s close.
Harumi Ban of Sanwa Bank said the fall in stocks had little effect so far in the currency market. ″If stocks fall further we might see an impact but right now I don’t see any great change.″
The benchmark No. 129 10-year Japanese government bonds stood at 103.10 points as of 11 a.m. (9 p.m. EST Sunday), up from Friday’s close of 102.98 points. Their yield fell to 5.845 percent from 5.865 percent.