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Tokyo stocks finish strong

By Ben Rooney, staff reporter


NEW YORK (CNNMoney) -- Japanese stocks rebounded Wednesday, with the leading stock index recovering nearly 6% from a two-day plunge stemming from the crisis created by the March 11 earthquake.

The Nikkei 225 index, the most prominent measure of Tokyo market stocks, ended up 489 points, or 5.7%.

The rebound came after intense selling over the previous two days, the first full-day sessions following the quake. On Tuesday, the index plunged 10.6%, marking the third worst one-day plunge in the Nikkei's history. The losses over two days totaled more than 16%.

The rebound in the Nikkei occurred as the Bank of Japan reportedly poured more cash into the markets to prop them up in the short term, following the bank's initial $180 billion cash injection announced Monday.

Investors in Japan have been stunned by the devastation caused by last week's earthquake and tsunami, including an increasingly dire situation at the Fukushima Daiichi nuclear power plant.

On Wednesday, officials asked workers at the plant to evacuate temporarily after a white cloud of smoke rose above the plant and radiation levels spiked. Authorities later allowed them to return after radiation levels dropped, the Tokyo Electric Power Company said.

The plant was crippled after a 9.0-earthquake, the fifth-largest worldwide since records began, struck off Japan's coast on March 11. Within an hour, a wall of water measuring up to 30 feet high swept across the Japanese coast, destroying entire towns and villages in its path.

The death toll has risen to 3,771, according to Japan's National Police Agency. At least 7,843 people were still missing as of Wednesday afternoon, and 2,044 were injured.

Economists say it is too soon to accurately estimate the financial toll of the disaster, but one expert said Tuesday that losses could exceed the record $125 billion that Hurricane Katrina caused in 2005.

In a statement, Atsushi Saito, the chief executive of the Tokyo Stock Exchange Group, attributed the selling to worries about "the degradation of social infrastructure" and the damaged nuclear power plant.

But he said Japan's experience recovering from past earthquakes "should not be underestimated" and that he believes "the stock market will calm down soon."

"I believe that the Tokyo Stock Exchange in its role as an important social infrastructure should continue to provide opportunities for stock trading," he added. "I would appreciate it if all investors and trading participants would respond in a calm and orderly manner."

Elsewhere in Asia, China's Shanghai Composite ended up 1.2%, while Hong Kong's Hang Seng index closed up 0.1%.

Stocks in London, Paris and Frankfurt fell in midday trading.

On Tuesday stocks in the United States recovered some ground late in the session but ended sharply lower as investors looked past a somewhat positive statement from the Federal Reserve to focus on events in Japan.

-- The CNN Wire Staff contributed to this report. To top of page

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Cisco Systems Inc 28.92 0.45 1.58%
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Morgan Stanley 27.78 0.37 1.35%
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