Another new twenty year low, and five straight sessions going down. Little Easter cheer from Japan.
Japanese stocks plumbed a new 20-year low on Monday, as worries regarding the global economy in the wake of the Iraq war ceased to abate. Downward pressure was exacerbated by pension-fund selling.
The benchmark Nikkei 225 average was off 0.8 per cent to 7,795.49, as shares continued their decline for a fifth straight session. The broader Topix index was off 0.9 per cent to 775.61.
On Friday, the Nikkei fell to a 20-year low, sparked by heavy selling by pension-funds, a trend that continued on Monday. Japanese pension funds are set to return a portion of their poorly-performing assets to the state later this year. Many trustees are opting to hand back cash, exerting a steady downward pressure on the market.
In a report entitled, "The Death of Equities?", strategist Masatoshi Kikuchi at Merrill Lynch in Tokyo said: "Japanese stocks have failed to rise, in spite of what looks like a quick end to the war in Iraq. We had expected the market to under-perform, but at the same time be aided to some extent by temporary rallies in the US market on indications of a coalition victory. It appears we were overly optimistic."
Source: Financial Times