Shares in Japanese manufacturing companies tumbled following Friday's devastating earthquake, as companies struggled to gather information and investors worried the after-effects of the disaster would hobble production.
The tremor and tsunami killed thousands and knocked out transport and communication links in parts of northern Japan, where many are still without water and electricity.
Auto and electronics makers were among the worst hit when trading resumed on Monday. Concerns about rolling power blackouts that will affect Tokyo and surrounding areas over the next few weeks added to the existing challenge of inspecting and repairing north Japan plants amid further aftershocks.
"It will take quite some time until investors' confidence in Japanese manufacturers returns. When we look back at the Kobe earthquake, it took about a week to get an overall picture of the magnitude of the damage," said Toshihiko Matsuno, senior strategist at SMBC Friend Securities, referring to the 1995 earthquake that killed more than 6,400 people.
"At this point, it's absolutely unclear how the power cut will affect manufacturers' production and businesses."
Analysts said investors were likely to be risk-averse, especially given fears over a possible uncontrolled radiation leak at a nuclear plant north of Tokyo, which was rocked by a second explosion on Monday.
Shares in Sony Corp ended 7.7 percent down in the morning session after the company suspended production at eight plants in the affected region.
Nissan's shares dropped 8.5 percent, with the automaker shuttering all four of its auto assembly plants in Japan. Toshiba Corp, a conglomerate whose products include semiconductors and nuclear reactors, dived 16.3 percent. Hitachi also fell more than 15 percent.
Shares in Tokyo Electric Power Company (TEPCO) were untraded amid a glut of sell orders.
"The potential impact from the situation at TEPCO's nuclear power plant is the biggest difference between this earthquake and the Great Hanshin earthquake," said equities strategist Kiichi Murashima at Citigroup, referring to the Kobe disaster.
"There is a chance that a meltdown will occur at the plant in Fukushima. A reduction in power supply would of course severely impact Japan's economic activity," he added.
The nuclear industry would also likely see an effect on long-term sales, he said.
Many firms are still trying to compile information about the condition of their plants and how the power cuts might affect them.
Amid the destruction, there were some winners among Japanese stocks. Construction shares surged on expectations of booming orders to rebuild northeastern Japan, pushing the construction sector index up 8.5 percent to an 18-month high.
Shares in general contractor Kajima Corp jumped 31 percent, while rival Hazama Corp rose 41 percent and home builder Misawa Homes was inundated by a glut of buy orders.
(Reporting by Mariko Katsumura, Mayumi Negishi and Isabel Reynolds; Editing by Edwina Gibbs and Joseph Radford, sourced:Reuters)
The tremor and tsunami killed thousands and knocked out transport and communication links in parts of northern Japan, where many are still without water and electricity.
Auto and electronics makers were among the worst hit when trading resumed on Monday. Concerns about rolling power blackouts that will affect Tokyo and surrounding areas over the next few weeks added to the existing challenge of inspecting and repairing north Japan plants amid further aftershocks.
"It will take quite some time until investors' confidence in Japanese manufacturers returns. When we look back at the Kobe earthquake, it took about a week to get an overall picture of the magnitude of the damage," said Toshihiko Matsuno, senior strategist at SMBC Friend Securities, referring to the 1995 earthquake that killed more than 6,400 people.
"At this point, it's absolutely unclear how the power cut will affect manufacturers' production and businesses."
Analysts said investors were likely to be risk-averse, especially given fears over a possible uncontrolled radiation leak at a nuclear plant north of Tokyo, which was rocked by a second explosion on Monday.
Shares in Sony Corp ended 7.7 percent down in the morning session after the company suspended production at eight plants in the affected region.
Nissan's shares dropped 8.5 percent, with the automaker shuttering all four of its auto assembly plants in Japan. Toshiba Corp, a conglomerate whose products include semiconductors and nuclear reactors, dived 16.3 percent. Hitachi also fell more than 15 percent.
Shares in Tokyo Electric Power Company (TEPCO) were untraded amid a glut of sell orders.
"The potential impact from the situation at TEPCO's nuclear power plant is the biggest difference between this earthquake and the Great Hanshin earthquake," said equities strategist Kiichi Murashima at Citigroup, referring to the Kobe disaster.
"There is a chance that a meltdown will occur at the plant in Fukushima. A reduction in power supply would of course severely impact Japan's economic activity," he added.
The nuclear industry would also likely see an effect on long-term sales, he said.
Many firms are still trying to compile information about the condition of their plants and how the power cuts might affect them.
Amid the destruction, there were some winners among Japanese stocks. Construction shares surged on expectations of booming orders to rebuild northeastern Japan, pushing the construction sector index up 8.5 percent to an 18-month high.
Shares in general contractor Kajima Corp jumped 31 percent, while rival Hazama Corp rose 41 percent and home builder Misawa Homes was inundated by a glut of buy orders.
(Reporting by Mariko Katsumura, Mayumi Negishi and Isabel Reynolds; Editing by Edwina Gibbs and Joseph Radford, sourced:Reuters)
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