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Stocks Tumble Again, Dollar Up

September 27, 1990

TOKYO (AP) _ Pessimism about the Middle East and other negative factors sent share prices on the Tokyo Stock Exchange plummeting again today, while the dollar closed slightly higher against the Japanese yen.

The 225-issue Nikkei Stock Average lost 478.71 points, or 2.15 percent, to close at 21,478.71 points, its lowest finish since Jan. 4, 1988. Volume on the first section was an estimated 430 million shares.

On Wednesday, the index shed 1,108.70 points, or 4.75 percent. It was the ninth largest single-day decline in the index’s history, and the lowest level in 33 months.

The Tokyo Stock Price Index, which lists all shares on the exchange’s First Section, has been an even better guide to recent market activity, said Yoshio Miyauchi, an equities trader for Shearson Lehman Hutton Asia.

The TOPIX index weighs shares according to the company size and other factors, so a fall in the stock value of a large company has a greater impact than an equal decline in the value of a smaller company.

Today, the TOPIX index fell 31.18 points, or 1.89 percent, to 1,620.26, the lowest level since Jan. 1, 1988.

The Nikkei has lost a total of 44.05 percent since the beginning of the year, the second largest cumulative percentage loss after World War II. In 1965, the index fell 44.2 percent.

News that the Baghdad had notified the United States embassy in it would apply the death penalty to anyone hiding foreigners in diplomatic embassies sent the stock market plummeting in the morning, analysts said.

The market recovered during the day but ended down.

″I am afraid to say that Japanese investors just lost all confidence,″ especially after the Nikkei index fell below the psychological barrier of 23,000 points on Wednesday, said Amy Yip, manager of sales at Baring Securities.

Said another trader half-seriously: ″Everybody wants to die.″

Individual investors had been propping up the market for a couple of months after institutional investors retreated to the sidelines. But they are running out of energy under pressure from higher interest rates and inflation fears linked to higher oil prices, Yip said.

North Sea Brent crude oil prices came down sharply today on word that the United States would be selling 5 million barrels of oil from its strategic petroleum reserves to stem rising prices.

At about 3 a.m. EDT in Tokyo, Brent crude for November delivery was notionally valued at about $36.60 a barrel, or less than the $38.10-a-barrel price seen in New York late Wednesday.

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