Stocks in Tokyo slid the most since 2008, leading a global drop in equities, and oil fell after Japan’s biggest earthquake on record. The euro strengthened, European bank shares rose and Greek bonds soared as leaders agreed to expand the region’s rescue fund. The Nikkei 225 Stock Average plunged 6.2 percent, the largest drop since December 2008. The Stoxx Europe 600 Index fell 0.7 percent and the Standard & Poor’s 500 Index declined 0.5 percent as of 9:34 a.m. in New York. Crude lost as much as 2.7 percent to dip below $99 a barrel, while the euro rose against all but one of its 16 most-traded peers. The yield on the Greek 10-year bond sank 46 basis points, with the cost of insuring European sovereign debt falling the most in five weeks. The Bank of Japan pumped a record 15 trillion yen ($183 billion) into the financial system and doubled the size of its asset-buying program to shield the economy from the effects of the quake. Officials in Europe widened the scope of their 440 billion-euro ($614 billion) bailout fund and eased the terms of Greek rescue loans, even as they resisted calls to buy bonds in the open market or finance buybacks. “People are selling stocks in Japan because nobody knows the extent of the damage at the moment, and the rebuilding costs are likely to be huge,” said Charles Diebel, head of market strategy at Lloyds Bank Corporate Markets in London. “As for Europe, the decision from Brussels is likely to provide a boost for euro assets. The positive impact may be short-lived, though. The measures may buy them more time, but the solutions present no panacea for the debt crisis.” Nuclear Stocks The slump in the Nikkei 225 pushed the index to the lowest level in four months as the official death toll from the quake reached 1,823, with 2,369 more missing. Tokyo Electric Power Co., which is battling to avoid a meltdown at its Fukushima nuclear plant following a hydrogen explosion, tumbled 24 percent. Toshiba Corp., a maker of nuclear reactors, slid 16 percent. Default swaps on Tokyo Electric Power Co. soared more than 220 percent to a record 133 basis points, while contracts on Japan jumped 11 to 94, that highest since July, according to CMA. The S&P 500, the benchmark gauge for U.S. equities, dropped for the third time in four days. General Electric Co. lost 2 percent. The incidents at the Japanese nuclear plants have compelled China and India to review plans for atomic energy that were set to provide a boon for suppliers including Areva SA and GE. Uranium Producers Producers of uranium for nuclear plants also slumped, with Bethesda, Maryland-based USEC Inc. dropping 16 percent, while Canada’s Cameco Corp. tumbled 22 percent and Denison Mines Corp. sank 29 percent in Toronto. Three stocks fell for every two that gained in the Stoxx Europe 600. Swiss Reinsurance Co. and Munich Re, the world’s biggest reinsurers, lost more than 3 percent. Burberry Group Plc sank 4.8 percent, leading luxury-goods companies lower amid speculation sales in Japan may suffer. E.ON AG and RWE AG, Germany’s largest nuclear power plant operators, fell more than 4.9 percent on concern the Japanese reactor explosions may persuade the German government to backtrack on extending the life of atomic plants. Areva SA, the biggest provider of nuclear equipment and services, sank 7.7 percent and lost as much as 10 percent, the most since November 2008. Solarworld AG and Renewable Energy Corp. ASA led gains in alternative-energy shares, rallying more than 8.9 percent. European Banks Banco Santander SA, Spain’s biggest lender, led gains in European banks after the region’s leaders agreed to reinforce the bailout fund. BNP Paribas SA, France’s largest bank, climbed 0.9 percent and Societe Generale SA advanced 1.9 percent. The MSCI Emerging Markets Index climbed 0.7 percent, led by automakers and steel producers including South Korea’s Hyundai Motor Co. and Russia’s OAO Severstal, after the quake damaged plants of Japanese rivals and spurred speculation that raw- materials demand will increase as the country rebuilds. The euro climbed 0.5 percent to $1.3971, and jumped 0.8 percent against the yen to 114.61. The Australian and New Zealand dollars fell. The extra yield, or spread, investors demand to hold Greek 10-year bonds instead of benchmark German bunds narrowed 62 basis points, with the Portugal-German spread contracting 21 basis points. Irish bonds underperformed, with the gap to bunds shrinking 14 basis points, as EU leaders rejected the nation’s bid for relief after Prime Minister Enda Kenny refused to increase the country’s 12.5 percent corporate tax rate. Default Swaps The cost of insuring European sovereign debt dropped the most in five weeks. The Markit iTraxx SovX Western Europe Index of swaps on 15 governments fell 14.5 basis points to 174. West Texas Intermediate crude oil for April delivery slid 1.5 percent to $99.63 a barrel as halts at several Japanese refineries will reduce demand for the raw material. U.K. and U.S. natural gas and Asian gasoil rallied as the Japanese nuclear reactor shutdowns boost demand for alternative fuels used to make electricity. Rubber for August delivery, a material used by carmakers, plunged as much as 13 percent to 335 yen per kilogram on the Tokyo Commodity Exchange. Gold for immediate delivery advanced 0.8 percent to $1,428.32 an ounce. To contact the reporter on this story: Daniel Tilles in London at dtilles@bloomberg.net To contact the editor responsible for this story: Paul Sillitoe at psillitoe@bloomberg.net.

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