Japan stock index drops to 4-month closing low
TOKYO (AP) – Japan’s key stock index dropped more than 3 percent to a four-month closing low Friday after worries over the fate of money-losing General Motors Corp. and growing pessimism about the U.S. economy dragged Wall Street sharply lower overnight.
The benchmark Nikkei 225 index tumbled 260.39 points, or 3.5 percent, to 7,173.10, the lowest since it closed at 7,162.90 on October 27, 2008. The broader Topix index fell 2.7 percent to 721.39, the lowest since Dec. 24, 1983 when it finished at 715.68.
“Taking a cue from Wall Street, investors dumped shares, and their sentiment was really downbeat throughout the day due to uncertainty over the fate of GM,” said Masatoshi Sato, market analyst at Mizuho Investors Securities Co.
“Investors cannot really figure out what will happen to GM. If it goes under, investors are worried about its ripple effect on the auto industry, the U.S. economy and the U.S. stock market. They are worried that the impact of GM’s bankruptcy on the U.S. economy will be massive,” Sato said.
U.S. stocks slid to their lowest levels in more than 12 years Thursday on sustained worries over the nation’s financial system and fresh concerns about GM, which said in its annual report that auditors raised serious doubt about its ability to continue operating.
The struggling U.S. auto giant has already received $13.4 billion in federal loans, and is seeking a total of $30 billion from the government.
Some investors stayed on the sidelines in Tokyo ahead of Friday’srelease of U.S. Labor Department report for February, which is likely to show hundreds of thousands of jobs were lost during the month.
“Investors are bracing for another grim data (release),” Sato said. “With the U.S. and Japanese stocks falling to such low levels, we should be seeing some buyback, but investors are not coming back to the market due to deepening worries over the global economy,” he said.
Toyota Motor Corp., the world’s largest automaker, fell 2.8 percent to 2,900 yen. Honda Motor Co. lost 4.9 percent to 2,150 yen. Nissan Motor Co. shed 1.2 percent to 326 yen.
Sony Corp. was down 3.8 percent at 1,715 yen, and Panasonic Corp. declined 2.4 percent to 1,091 yen.
In foreign exchange, the dollar was trading at 97.43 yen, down from 98.20 yen in New York late Thursday. The euro traded at $1.2646 from $1.2548.
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