Japanese stock futures and shares of Australian uranium producers fell after Japan’s strongest earthquake on record caused large-scale destruction in the country’s northeast, including to nuclear power stations.
American depositary receipts of Hitachi Ltd., a Japanese maker of nuclear-power plants, sank 2.8 percent from the last closing share price in Tokyo after some reactors were damaged by the quake. ADRs of Toyota Motor Corp., Honda Motor Co. and Nissan Motor Co. retreated at least 2.4 percent after Japan’s three-largest carmakers said thousands of new vehicles were damaged. Those of Tokio Marine Holdings Inc., Japan’s largest property and casualty insurer by market value, plunged 8.9 percent. Energy Resources of Australia Ltd., a uranium producer, plunged 8.5 percent.
Futures on Japan’s Nikkei 225 (NKY) Stock Average expiring in June closed at 9,975 in Chicago on March 11, compared with 10,170 in Osaka, Japan. They were bid in the pre-market at 9,960 in Osaka, at 8:05 a.m. local time. Australia’s S&P/ASX 200 Index declined 1 percent today. New Zealand’s NZX 50 Index slid 0.5 percent in Wellington.
“There should be an impact on companies’ production and logistics, just as the Great Hanshin Earthquake did, and there’s no doubt Japan’s economic indicators will worsen temporarily,” said Toshio Sumitani, a strategist at Tokai Tokyo Research Center, referring to a temblor that struck the city of Kobe in 1995.
Futures on the Standard & Poor’s 500 Index lost 0.6 percent today. In New York, the index advanced 0.7 percent on March 11, as gains in fuel, metal and industrial companies helped the market overcome a global slump following Japan’s worst earthquake on record.
Tokyo Electric’s Reactors
The 8.9-magnitude temblor and subsequent tsunami may have killed 10,000 people in Miyagi prefecture north of Tokyo, national broadcaster NHK reported, citing local police. The official toll reached 977, with 739 more missing and 1,683 injured, the National Police Agency said.
Radiation levels around the Tokyo Electric Power Co. station in Fukushima, 135 miles north of the capital, rose after cooling systems at a second reactor failed, heightening concerns about a possible meltdown following an explosion there March 12. Water levels fell at a third reactor, raising the possibility of a hydrogen explosion, Japan’s top government spokesman said.
Tokyo Electric Power Co. will start service outages in parts of the greater Tokyo area today, according to a statement. The biggest supplier of electricity in the capital will divide its service area into five groups, each with three-hour outages from 6:20 a.m. to 10 p.m.
MSCI Asia Pacific
Bank of Japan Governor Masaaki Shirakawa told reporters he’s ready to unleash “massive” liquidity starting this morning in Tokyo to assure financial stability.
The MSCI Asia Pacific Index declined 1.9 percent this year through March 11, compared with a gain of 3.7 percent by the S&P 500 and a drop of 0.1 percent by the Stoxx Europe 600 Index. Stocks in the Asian benchmark are valued at 13.6 times estimated earnings on average, compared with 13.5 times for the S&P 500 and 11 times for the Stoxx 600.
The yen appreciated to 81.63 against the dollar, compared with 82.90 at the close of stock trading in Tokyo on March 11, a level not seen since March 3. Against the euro, Japan’s currency strengthened to as much as 112.93 after the quake from 114.61. A stronger yen reduces income at Japanese companies when overseas revenue is converted into their home currency.
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