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LEAD: Nikkei dives 9.62% to 5-year, 5-month low on panic selling+
(Japan Economic Newswire Via Acquire Media NewsEdge) TOKYO, Oct. 10_(Kyodo) _ (EDS: ADDING INFO, SECOND LEAD TO FOLLOW)
Tokyo stocks took another dive Friday, sending the key Nikkei average down more than 9 percent from Thursday to its lowest level in about five years and five months, as investors grew fearful about the global financial crisis following an overnight slump on Wall Street and the dollar's plunge against the yen.
The 225-issue Nikkei Stock Average lost 881.06 points, or 9.62 percent, from Thursday to 8,276.43, marking its lowest close since May 28, 2003.
At one point in mid-morning, the Nikkei shed over 1,040 points, or over 11 percent, to 8,115.41, and looked poised to mark its second-largest one-day loss since October 1987. But it trimmed the loss later on some buying on dips, brokers said.
The broader Topix index of all First Section issues on the Tokyo Stock Exchange was down 64.25 points, or 7.10 percent, to 840.86.
Both the Tokyo bourse and the Osaka Securities Exchange briefly suspended some futures and options trading by triggering an emergency measure called the "circuit breaker" to stem a sudden plunge in prices.
All 33 sectors on the Tokyo market fell, with pharmaceutical, insurance, utility and banking issues among the hardest hit.
The broad-based sell-off in Tokyo came after overnight steep falls on Wall Street, which sent the Dow Jones index down 678.91 points -- the third largest single-day fall in U.S. history -- to the lowest closing in nearly five and a half years.
The U.S. dollar's sudden drop to the 97 yen level in the early morning from around the 99 yen line also boosted investors' concerns over the course of the export-oriented Japanese economy, brokers said. A lower dollar against the yen depreciates the value of Japanese exporters' overseas earnings when they are repatriated.
"Investors' sentiment froze in horror," said Hiroichi Nishi, equities chief at Nikko Cordial Securities Inc.
A series of bankruptcies in the Japanese real estate and insurance sectors due to the credit squeeze and losses related to the U.S. subprime mortgage turmoil also soured sentiment on the Tokyo market.
Sompo Japan Insurance dropped 94 yen, or nearly 12 percent, to 704 yen after Yamato Life Insurance Co., a midsize insurer based in Tokyo, collapsed Friday due to subprime-linked losses.
Mitsubishi Estate shed 145 yen, or 8 percent, to 1,642 yen as confidence in Japan's real estate sector was battered after New City Residence Investment Corp., a U.S.-affiliated real estate investment trust, filed for bankruptcy protection Thursday. It became the first listed REIT to go bust in Japan.
Tsuyoshi Segawa, an equity strategist at Shinko Securities Co., said that recent moves by authorities worldwide to thaw frozen credit markets, including coordinated global interest-rate cuts, are insufficient to calm the mounting financial fear as global stock markets show.
"In Japan, credit uncertainty is increasingly growing," Segawa said. He said Japan's first bankruptcy of REIT was "quite shocking" as the listing of REIT issues increased sharply in recent years and not only individuals but also many financial institutions hold such equities.
On the First Section, declining issues outnumbered advancing ones 1,499 to 175, with 40 others remaining unchanged.
Value leader Mizuho Financial Group fell 44,000 yen, or over 11 percent, to 330,000 yen while volume leader Nippon Steel slid 7 yen, or 2 percent, to 294 yen.
Trading volume on the main section came to 3,274.41 million shares, up from Thursday's 2,918.98 million.
The TSE's Second Section index was down 57.72 points, or 2.98 percent, to 1,877.49 on a volume of 59.04 million shares. On the Osaka Securities Exchange, the near-term December Nikkei 225 index futures contract was down 1,180 points to 8,020.
Copyright ? 2008 Kyodo News International, Inc.
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