Nikkei drops 138 points on session

The Nikkei 225 closed below the 14,000 level for the first time in more than two years on Tuesday as Tokyo’s equities markets saw declines on a stronger yen and comments from the Bank of Japan’s governor indicating that Japan’s economy is slowing. The Nikkei dropped 0.98 percent to 13,972.63, losing 138 points on the session, while the Topix index was down 1.99 percent to 1,350.2 and the Mothers market plummeted 6.3 percent to 659.08. Banks, the oil sector, and automobile manufacturers all saw declines, but there were gains in the retail sector on quarterly results.

The losses in Tokyo led most markets in the Asia-Pacific region lower on the day, with many of the losses being significant. The exception to declines, for the second day in a row, came in Taiwan as the Taiex added 3.13 percent to 8,428.84, a gain of 255 points. The gains came on speculation that the opposition party victory in parliamentary elections will mean that restrictions on investment in mainland China will diminish.

The least of the declines came in Australia, where the S&P/ASX200 was down 0.33 percent to 5,960 and the Sydney Ordinaries fell 0.35 percent to 6,019.8. The Shanghai Composite was 0.98 percent lower to 5,443.79 while South Korea’s Kospi index dropped 1.07 percent to 1,746.95. The FTSE Straits Times Index was down 1.98 percent to 3,154.58 in Singapore, the Sensex was 2.3 percent lower to 20,251.09, and the Hang Seng index lost 630 points as it fell 2.38 percent to 25,837.78.

Europe’s markets saw significant declines. The FTSE Eurofirst 300 fell 2.41 percent to 1,397.62. In Frankfurt, the Dax saw its biggest one-day decline in 4 months after the Zew index of investor and analyst expectations dropped to -41.6, its lowest level in 15 years and a bigger than anticipated decline. The Paris CAC-40 was down 2.83 percent to 5,250.82 while the IBEX dropped 2.85 percent to 14,020.8, a decline of 411 points. There were no gainers on the CAC-40 and only 3 on the Dax, with utilities seeing the biggest advances.

In London, the FTSE 100 lost 3.06 percent, or 190 points, to 6,025.6 while the FTSE 250 dropped 265 points, or 2.65 percent to close at 9,765.8. Banks were down significantly, with most declines in the 3 percent to 4 percent range or more. Homebuilders and property investors saw declines, as did the oil sector. The retail sector was mixed, but with the vast majority of the sector’s components seeing declines. The media sector was also mixed.

Wall Street was much lower in afternoon trade after a decline in retail sales in the US in December and on bad news from the financial services sector. The Dow Jones Industrial Average was 1.8 percent lower, dropping 229 points to 12,548.67. Meanwhile the Nasdaq Composite fell 2.36 percent to 2,419.63 and the S&P 500 dropped 2.17 percent to 1,385.46. The banking sector was lower. Computer related sectors, including software groups and the internet sector, also saw declines. There were gains in the airlines sector.

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