Japanese shares fall 2.64 pc in early trade

Tokyo, Nov 10: Japanese shares dropped 2.64 per cent in early trade today (Nov 10) as global financial fears intensified after Italian government bond yields shot above levels regarded as unsustainable.

The Nikkei index at the Tokyo Stock Exchange lost 230.83 points to 8,524.61 in early trade. The Topix index of all first-section shares fell 2.80 per cent or 20.95 points to 728.45. The plunge in Japanese shares came after US and European stock markets dropped as Italian debt yields soared as high as 7.4 per cent, a level seen as unsustainable for the finances of the eurozone's third-largest economy.

Even though Prime Minister Silvio Berlusconi has pledged to resign once credible economic reforms are in place, markets see the future as still unclear. The surge in Italian borrowing costs came at a sensitive time for the eurozone as "the details of the European Financial Stability Facility (bailout fund) aren't nailed down yet," said Yumi Nishimura, senior market analyst at Daiwa Securities.

On currency markets, the euro bought USD 1.3518 and 105.24 yen, down from USD 1.3544 and 105.38 yen in New York. The dollar stood at 77.86 yen, up a touch from 77.78 in New York yesterday. On Wall Street, the eurozone worries pushed the Dow Jones Industrial Average down 3.20 per cent to close at 11,780.94. The broad-based S&P 500 lost 3.67 per cent to 1,229.10, while the tech-heavy Nasdaq Composite tumbled 3.88 per cent to 2,621.65.

AFP