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Japanese share prices were down nearly five per cent in mid-morning trade on Tuesday as the collapse of US investment bank Lehman Brothers sent shockwaves through investors, traders said.
The benchmark Nikkei-225 index was down 599.04 points or 4.90 per cent to 11,615.72.
Banking shares were down sharply as investors raced out of the sector following the collapse of Lehman Brothers.
The bank's bankruptcy filing 'was a shock for players in stock markets and made them shun further risks,' said Mr Kazuhiro Takahashi, equity head at Daiwa Securities SMBC.
Investors had hoped that other banks would put up money for Lehman or that the Federal Reserve would engineer a deal, as it did earlier when it helped JPMorgan buy Bear Stearns at a bargain price.
'There had been expectations for some sort of federal support,' Mr Takahashi said.
arket participants now feel betrayed, thought the federal government may have just thought it was doing the logical thing.'
Global markets went into a dizzying fall on Monday, when Japanese markets were closed for a public holiday. -- AFP
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