Japan quake: Little impact on global markets

chart_ws_index_nikkei.top.pngJapan's stock market underperformed U.S. markets, even before the earthquake struck. Click the chart for more world market data. By Ken Sweet, contributing writer


NEW YORK (CNNMoney) -- Despite the overwhelming human toll, investors said they expect the Japanese earthquake of 2011 to have little impact on world markets over the next few months.

In the first full trading day following last week's quake, Japan's Nikkei 225 plunged 6.2% Monday.

Other world markets were mostly lower, but the decline was generally more muted. In Europe, Britain's FTSE 100 ended down less than 1%, while Germany's DAX fell 1.7% and France's CAC 40 lost 1.3%.

There were gains in Asia -- Hong Kong's Hang Seng rose 0.4% Monday, while China's Shanghai Composite edged up 0.1%.

Investors said that while Japan's disaster weighed on investor sentiment Monday, attention will eventually turn back to oil, which investors believe will be the bigger story in the longer run. After being down as much as $2.69 earlier, oil was little changed at just above $101 a barrel.

"The potential for rising oil prices because of the turmoil in the Middle East, on a macro basis, will have a considerably bigger impact on the global economy than this earthquake," said Josh Feinman, global chief economist for DB Advisors, the asset management division of Deutsche Bank.

Investors gave a few reasons for why the disasters in Japan won't have a major market impact.

For one, Japan's economy hasn't been a growth leader for years. While Japan does have the third-largest economy behind the U.S. and China, Japanese gross domestic product has been basically unchanged since the late 1990s.

Investors had not expected Japan to help bring the global economy out of its recession, unlike its Asian counterpart China. Had this earthquake happened in a major industrialized part of China, investors would have more reason to be concerned.

Further, investors expect Japan to spend resources to rebuild its infrastructure, which should provide a medium-term boost to the country's economy.

"If there was any silver lining to this earthquake, it would be that the Japanese government is going to have to invest heavily in infrastructure and other assets," said Charles Whitehead, a professor at Cornell University and a former Citigroup executive who was based in Japan.

In addition, questions remain regarding the status of Japan's nuclear power plants and whether the partial meltdown at one of the plants could impact future energy generation globally.

"Nuclear power generation has been slowly gaining support both here in the U.S. and in Europe," Feinman said. "I'm afraid this is going to set back nuclear power construction yet again." To top of page

Frontline troops push for solar energy
The U.S. Marines are testing renewable energy technologies like solar to reduce costs and casualties associated with fossil fuels. Play
25 Best Places to find rich singles
Looking for Mr. or Ms. Moneybags? Hunt down the perfect mate in these wealthy cities, which are brimming with unattached professionals. More
Fun festivals: Twins to mustard to pirates!
You'll see double in Twinsburg, Ohio, and Ketchup lovers should beware in Middleton, WI. Here's some of the best and strangest town festivals. Play
Overnight Avg Rate Latest Change Last Week
30 yr fixed4.36%4.24%
15 yr fixed3.39%3.26%
5/1 ARM3.36%3.27%
30 yr refi4.34%4.22%
15 yr refi3.38%3.24%
Rate data provided
by Bankrate.com
View rates in your area
 
Find personalized rates:
Index Last Change % Change
Dow 16,408.54 -16.31 -0.10%
Nasdaq 4,095.52 9.29 0.23%
S&P 500 1,864.85 2.54 0.14%
Treasuries 2.72 0.08 3.19%
Data as of 7:11am ET
Company Price Change % Change
Bank of America Corp... 16.15 0.02 0.12%
General Electric Co 26.56 0.44 1.68%
Cisco Systems Inc 23.21 0.18 0.78%
Micron Technology In... 23.91 1.43 6.36%
Alcoa Inc 13.56 0.14 1.04%
Data as of Apr 17

Sections

Owners of the 2.6 million General Motors cars with faulty ignition switches have started to get their cars repaired. But if history is any indication, there are likely to be hundreds of thousands of the cars that never get fixed. More

Obamacare sign ups hit 8 million, though final enrollment remains to be seen. More

Office for iPad move is a symbolic victory for Nadella's Microsoft, but the company is still weighed down by many of the same old issues. More

Schwinn, Trek and Cannondale are all iconic American bicycle brands. But none of them are made in the United States. More

Getting people to donate money is a big business, and some universities, hospitals and other nonprofits are rewarding their top fundraisers with as much as $1 million to bring in the big bucks. More

Market indexes are shown in real time, except for the DJIA, which is delayed by two minutes. All times are ET. Disclaimer LIBOR Warning: Neither BBA Enterprises Limited, nor the BBA LIBOR Contributor Banks, nor Reuters, can be held liable for any irregularity or inaccuracy of BBA LIBOR. Disclaimer. Morningstar: © 2014 Morningstar, Inc. All Rights Reserved. Disclaimer The Dow Jones IndexesSM are proprietary to and distributed by Dow Jones & Company, Inc. and have been licensed for use. All content of the Dow Jones IndexesSM © 2014 is proprietary to Dow Jones & Company, Inc. Chicago Mercantile Association. The market data is the property of Chicago Mercantile Exchange Inc. and its licensors. All rights reserved. FactSet Research Systems Inc. 2014. All rights reserved. Most stock quote data provided by BATS.