Nikkei ends at 18-year low point Topix hits 17-year low on earnings, political jitters

By Mariko Ando, CBS.MarketWatch.com Last Update: 2:44 AM ET Feb. 5, 2002

TOKYO (CBS.MW) -- Tokyo's Nikkei Average ended at its lowest level in 18 years Tuesday as anxiety over a series of dismal corporate earnings reports and prospects for a delay in economic reforms at home set the scene for a tsunami of broad-based selling of stocks.

The Nikkei tumbled 156.33 points, or 1.6 percent, to close at 9,475.60 -- its lowest level since Dec. 15, 1983.

The gauge also breached the post-bubble closing low. The previous closing low after the end of asset-bubble economy was 9,504.41, logged within a week of the Sept. 11 terrorist attacks in the United States.

The broader Topix dropped 1.8 percent to 926.27, qualifying as its lowest reading since Feb. 13, 1985.

Investors dampened leading technology issues amid profit jitters as well as the weakness their U.S. peers showed Monday. The Nasdaq started off the trading week by sinking precipitously while the Dow Jones Industrials shed 2.2 percent to 9,687.09, its lowest close since Jan. 29.

Market sentiment took a sour turn in a reflection of rising fears that sinking popular approval ratings for Prime Minister Junichiro Koizumi would likely hinder his ability to shepherd along structural reforms in the Japanese economy, including disposal of banks' bad loans.

According to the latest poll by the Tokyo Shimbun, the support rate for Koizumi fell by 21.5 percentage points from December to a 58 percent reading following his dismissal of Makiko Tanaka as foreign minister.

Analysts said they were watching to see whether the Nikkei could hit a post-bubble intraday low of 9,382.

"If the Nikkei touches that level, then it could further accelerate the market's downward trend," said Yasuo Ueki, an independent analyst. Ueki wouldn't rule out the Nikkei retracing to the 9,000 level.

" I don't see any positive news in markets. Now, growing pessimism over Japan's economy is dominating the market ... Stock prices are less likely to pick up until the end of corporate earnings season."

-- Global Economic Meltdown (world@coming.unglued), February 05, 2002