Asian stocks badly shaken in aftermath of Japan disaster

Tokyo: Asian stocks fell, sending a regional benchmark stock index toward its steepest drop since June, as Japan worked to contain a nuclear accident following the nation's biggest earthquake.

Mitsubishi UFJ Financial Group, Japan's No 1 publicly traded bank, slid 7.2 per cent in Tokyo after police said the death toll from the earthquake and ensuing tsunami may top 10,000. Canon sank 5.9 per cent.

Australian uranium producers tumbled in Sydney as Japan worked to prevent a meltdown at damaged nuclear reactors. Caltex Australia, the nation's biggest oil refiner, rose 2.6 per cent on expectations of increased Japanese demand for refined fuel.

The MSCI Asia Pacific Index fell 2.8 per cent to 131.28 as of 6:02 pm in Tokyo, headed for its steepest drop since June 7 and lowest close since December 1. Nine of the 10 industry groups on the gauge declined, led by utilities stocks. Japan's Nikkei 225 Stock Average led declines, falling the most in two years. A measure of Asian stocks traded outside of Japan rose.

Demand on resources

"When you have the market the size of Japan down this much, it's going to affect everybody," said Stephen Halmarick, Sydney-based head of investment markets research at Colonial First State Global Asset Management, which oversees about $150 billion (Dh550.78 billion). "A tragedy of this proportion is going to take up a lot of economic resources. It's going to have quite a negative impact on growth."

The Nikkei 225 dropped 6.2 per cent in Tokyo. Most stocks were initially unable to begin trading at the Tokyo open as sell orders overwhelmed those to buy. Tokyo Electric Power, Asia's biggest power company battling to avoid a meltdown at its Fukushima nuclear plant, tumbled 24 per cent. Toshiba, a maker of nuclear reactors plunged 16 per cent.

Australia's S&P/ASX 200 Index declined 0.4 per cent in Sydney. Hong Kong's Hang Seng Index climbed 0.4 per cent and South Korea's Kospi Index gained 0.8 per cent in Seoul, reversing earlier losses of as much as 1.4 per cent. The MSCI Asia Pacific excluding Japan Index rose 0.4 per cent, with about the same number of stocks rising as falling.

"Markets were already in a corrective mode and the tragic events in Japan have provided a further impetus," said Nader Naeimi, a Sydney-based strategist at AMP Capital Investors, which manages about $98 billion. "While in human terms this is a terrible disaster, I don't see any significant lasting impact on investor sentiment or global growth."

Futures on the Standard & Poor's 500 Index lost 0.6 per cent yesterday. In New York, the index advanced 0.7 per cent on Friday, as gains in fuel, metal and industrial companies helped the market overcome a global slump following Japan's earthquake.

Tokyo Electric Power was yesterday to begin service outages in parts of the greater Tokyo area, according to a statement.

Meanwhile, Bank of Japan governor Masaaki Shirakawa told reporters he was ready to unleash "massive" liquidity starting yesterday in Tokyo to assure financial stability.