Japan's Nikkei fell more than 5 percent in early trading following a similar slide Wednesday on Wall Street as investors grapple with grim economic expectations for markets across the globe.
Japanese stocks tumbled more than five percent in early trade Thursday after Wall Street suffered a heavy sell-off overnight on renewed worries about the outlook for the global economy.
The drop wiped out the gains seen a day earlier as hopes grew that US president-elect Barack Obama will get to work on fixing the world's largest economy in the face of the worst financial crisis in decades.
The benchmark Nikkei-225 index was down 486.46 points or 5.11 percent at 9,034.78 by mid-morning, off a low of 8,979.02.
The sharp fall came after the Dow Jones index slid 5.05 percent on Wall Street on Wednesday as investors braced for a gloomy economic ride after the euphoria of Obama's election victory.
"Now that the event is over, investors are sobering up and looking at the economic gloom," said Mizuho Investors Securities broker Masatoshi Sato.
"The market is now watching what concrete economic measures his team will roll out. The question is how long will it take to see concrete measures? If it takes a long time, funds may move to sell," he warned.
The Nikkei rose 4.46 percent on Wednesday, mirroring strong gains across Asia on hopes that Obama will take new steps to end the financial crisis, and following Wall Street's strongest Election Day rally yet on Tuesday.
Investors were anticipating further cuts to interest rates on Thursday by both the Bank of England and the European Central Bank to give the economy another boost.
Date created : 2008-11-06