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Nikkei plunges
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August 31, 1999: 5:57 a.m. ET
Domestic factors and Wall Street's fall hit Tokyo, other Asian markets
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LONDON (CNNfn) - Tokyo shares slumped almost 500 points Tuesday as domestic factors and the sharp drop on Wall Street overnight caused Japanese investors to bail out. Most of Asia's other markets also registered losses.
The sell-off on the Nikkei 225 accelerated late in the day as it tumbled 482 points to 17,436.56, a drop of 2.7 percent. The bears were prodded into action by Japanese jobless data and the strength of the yen.
July unemployment rates remained at the previous month's record level of 4.9 percent, sparking concern that consumer spending could suffer.
"It can be seen as a positive sign that vigorous corporate restructuring is underway. But the negative impact would be larger as it would dampen individual consumption," said Kunihiro Hatae, general manager at Tokyo Securities.
Export-related blue chips were also undermined by the strength of the yen, which continued to hover around the 110.70 level for much of the session, little changed from its New York close overnight.
Fujitsu slumped 6.4 percent to 3,210 yen, while Sony Corp. lost 2.5 percent to end at 14,180 yen.
Banks also suffered as Sumitomo Bank plunged 6.7 percent to 1,500 yen and Fuji Bank lost 5.6 percent to 1,130 yen.
Sentiment across the region was hit by the tumble on Wall Street Monday as a set of strong economic data rattled U.S. markets. The sell-off picked up amid fears that interest rates could head higher again before the year is over.
Light trading volume, typical for the final weeks of summer, exaggerated the declines. The Dow Jones industrial average, suffering its third straight session of triple-digit losses, tumbled 176 points, or 1.6 percent, to 10,914.13.
The Nasdaq composite index fell 1.7 percent to 2,712.69 and the S&P 500 index fell 1.8 percent to 1,324.02.
Hong Kong's blue chips suffered a similar fate, although the selling let up in the afternoon. The Hang Seng index closed down 206 points at 13,482.77, a loss of 1.5 percent, following strong gains Monday. "We celebrated our GDP figures for one day, then we had a case of the Americans continuing to worry about interest rates," said James So, director of research at Asia Financial Securities.
The Straits Times index in Singapore also felt the fall-out from Wall Street and Tokyo as it slid 34 points to 2,117.17, down 1.6 percent.
South Korea's Kospi fared slightly better to close down 0.5 percent at 937.88 while Sydney's All Ordinaries shed 1.4 percent to end at 2,951.9.
Manila's Composite fell 1.3 percent to finish at 2,173.82.
Thailand's Set index recovered much of its earlier losses but was still down 0.9 percent at 442.67.
But Taiwan's Weighted index bucked the trend to close more than 1 percent higher at 8,157.73. The JSX index in Indonesia also clung on to marginal gains to end at 567.03.
Kuala Lumpur was closed for the National Day holiday.
-- from staff and wire reports
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