Japan crisis sends Aust shares to 14- week low Fear batters market
AUSTRALIAN shares closed at a 14-week low as fears of a nuclear catastrophe i n Japan battered investor confidence.
The Australian bourse managed to claw back some of its earlier losses after the Bank of Japan ( BoJ) injected $ 181 billion into that country’s money markets to keep the economy moving following the devastating tsunami triggered by a massive earthquake on Friday.
The bench mark S&P / ASX200 index was down 18.4 points, or 0.4 per cent, at 4 6 2 6 . 4 points while the broader All Ordinaries index retreated 24.7 points, or 0.52 per cent, to 4,710.1 points – its lowest finish since December 6 last year.
IG Markets market strategist Ben Potter said Asian bourses were all lower, with Japan’s Nikkei 225 unsurprisingly plunging 5.8 per cent ahead of a Bank of Japan ( BoJ) meeting later in the day when it kept its key rate unchanged at between zero and 0.1 per cent.
‘‘ Speculation suggests the BoJ will intervene and try to weaken the yen materially,’’ Mr Potter said.
The Japanese central bank also said it would increase its
CAUTION: Tokyo shares plunged almost six per cent yesterday as investors reacted to the biggest earthquake in Japan’s history asset purchase scheme by around 5 trillion yen ($ A59.28 billion) to 40 trillion yen ($ A474.21 billion) in an effort to inject liquidity into the financial system.
Mr Potter said traders had been solely focused on news from Japan. Preliminary estimates put repair costs from the disaster in the tens of billions of dollars – a huge blow to the already fragile Japanese economy – while the death toll is climbing beyond 2000 amid expectations it could reach tens of thousands.
Mr Potter said the weight of uncertainty on investor confidence and sentiment meant it would be difficult for the local market to recover some of its recently lost ground.
The domestic bourse has been down five out of the past six sessions.
Mr Potter said the bulk of the sectors were firmly in the red, with the energy, material and financial sectors doing the most damage.