BILLIONS WIPED OFF SHARES – after Japan stock market collapse


Billions of dollars, pounds and euros were wiped off worldwide share prices yesterday as investors took fright at the abrupt collapse and closure of the Tokyo stock exchange and a slump in US profits.

Leading US companies’ share prices fell sharply in opening trading on Wall Street yesterday following the Japanese slump in prices, oil price fears and the knock-on from lower than expected profits announced by computer giants Intel and Yahoo on Tuesday.

There were sharp falls on European stock markets in the wake of the Tokyo exchange closing 20 minutes early as a selling panic threatened a system meltdown and share prices crashed.

In morning trading, benchmark share indexes in London, Paris and Frankfurt fell by one per cent or more, with surging oil prices also dragging down share prices.

Among the main victims in Europe were German chip maker Infineon and French-Italian rival STMicroelectronics, both of whose share price was down about three per cent after US market leader Intel’s fourth-quarter profits slumped below expectations.

Losses at US technology giants IBM and Yahoo also added to concerns that many companies had entered 2006 with unrealistic profits forecasts.

Share prices on the London stock exchange were hit by a mixture of rising oil prices, disappointing US results and the sharp sell off in Japan.

By noon the FTSE 100 index was down 57.7 points, losing £11 billion, at 5,641.3 by midday.

Share prices on the Paris stock exchange followed the trend, falling in morning trading.

On the Tokyo exchange, a frantic day’s trading on Wednesday, was sparked by heavy selling in shares following allegations of fraud at internet firm Livedoor.

Share prices in Japanese technology stocks including Advantest, Canon and Toshiba were hit particularly hard.

The number of transactions had reached about four million by 1425 local time, close to the exchange’s capacity of 4.5 million trades per day.

Trillions of yen have been wiped off Japanese shares and the benchmark Nikkei index has now fallen more than six per cent in two days, with a slump in share prices hitting the Hong Kong and Australian exchanges before reaching Europe.