RTRS: Nikkei down 10.1 percent, looks at biggest fall since '87
TOKYO (Reuters) - The Nikkei average tumbled 10.1 percent on Friday, heading for its biggest one-day drop since the 1987 stock market crash and its seventh straight day of losses, on fears the financial crisis will lead to a global recession.
The early stock sell-off led the Osaka Stock Exchange to trigger a circuit-breaker and briefly halt trade in Nikkei futures.
A bankruptcy filing by unlisted Yamato Life Insurance shocked the market, given that Japan's financial institutions had appeared to be relatively resilient to the credit crisis tearing through the United States and Europe.
Amid the worsening sentiment, the benchmark Nikkei .N225 sank 934.83 points to 8,222.66. At one stage, it hit its lowest point since May 2003.
If it finishes at this level, it will surpass a 9.4 percent fall in the Nikkei earlier this week. During the 1987 crash, the Nikkei at one point fell 14.9 percent in a single day.
"The Nikkei has lost close to 20 percent in three days alone, and it's certainly not as if economic fundamentals have worsened that much in that time period," said Hiroaki Osakabe, a fund manager at Chibagin Asset Management.
"It's basically all psychological. And it's not going to stop until fears about the financial system have been erased."
Such fears were fed by New City Residence Investment Corp's 8965.T announcement on Thursday that it had filed for court protection from creditors. It became the first Japanese real estate investment trust to fail as fallout from the credit crunch spreads.
In a sign of growing concern, Japanese Prime Minister Taro Aso said on Friday that the stock slide could hurt the real economy.
Tech stocks were especially battered, with Kyocera Corp (6971.T: Quote, Profile, Research, Stock Buzz) losing 11 percent to 5,810 yen and TDK Corp (6762.T: Quote, Profile, Research, Stock Buzz) down 12.3 percent to 3,350 yen, but selling also extended to defensive shares that had been popular even during recent falls. Fast Retailing (9983.T: Quote, Profile, Research, Stock Buzz) lose 10.5 percent, becoming the biggest drag on the Nikkei 225, and Terumo Corp (4543.T: Quote, Profile, Research, Stock Buzz) lost 11.1 percent to 3,840 yen.
(Reporting by Elaine Lies; editing by Sophie Hardach)
