URGENT Prices Fall Sharply As New Trading Week Opens In Tokyo
TOKYO (AP) _ The Tokyo Stock Exchange careened downward again Monday morning at a frantic pace, refusing to shrug off fears from the tumultous chaos on markets around the world lahst week.
The Tokyo Stock Exchange’s best-known indicator, the 225-share Nikkei stock average, was down 1,414.47 points to 21,884.31 in afternoon trading.
The decline was second only to last Tuesday’s drop of more than 3,836 points, which followed a 508-point drop in the Dow Jones industrial average.
Ginger Tulley, an analyst at Vickers da Costa, said the plunge Monday resulted from ″general fear and uncertainty, particularly over what’s going to happen in Hong Kong.″
People are fairly certain which way it’s going to go - down,″ she said.
The Hong Kong market closed after last Monday’s session, during which its key indicator dropped 11 percent in value, and was not reopening until Monday. The session in Hong Kong was getting under way at 10 p.m. EST Sunday.
Ms. Tulley said another factor in the decline in Tokyo is ″some indication of less confidence in the dollar.″
The dollar lost 2.55 yen in opening trading Monday, to 141.60 from 144.15 on Friday. During last week’s stock price gyrations, currency markets had remained relatively stable. Dealers said Monday they worried that the sudden fall in the dollar suggested the stock market troubles are now being felt in other markets such as currency exchanges.
″There now is concern about how the exchange rate movement will affect the stock market,″ said Nobuyuki Ueda, a senior economist for the Japan Long-Term Credit Bank Ltd.
The dollar’s fall reflected Friday’s plunge in the currency in New York, which was triggered by rumors that a group of major monetary nations, the so- called Group of Seven, will soon hold a meeting in an attempt to lower the trading range for the dollar.
″Everyone is waiting to see what will happen later, since there were no overseas markets on Saturday. The market is searching for something to go on,″ said Kazuhiro Nakamura of Wako Securities. ″We have to see what happens this evening in London and New York.″
Early in the day, some analysts said they were confident of the stock market’s underlying strengths. ″Japan is the world’s financial giant,″ said Yukio Sugawara of Nikko Securities. ″The supply of stocks is small relative to demand, and I think resources will continue to pour into the market.″
″Price fluctuations overseas might have a strong effect on the (Tokyo) market, but it is still quite strong,″ Sugawara said.