The sell off on global markets deepened, then seemingly slowed overnight as Japan’s nuclear crisis worsened.
But for how long is now the question with reports from broadcaster, NHK early Wednesday morning that another fire has broken out at the Number 4 reactor at Fukushima, which had been involved in yesterday’s dramas.
Earlier this morning the crisis in Japan had grown with news that the two remaining reactors at the Fukushima Daiichi complex were showing sights of rising temperatures and were being cooled.
These latest reactors had been considered to be safe.
Tokyo Electric Power had earlier said the first four reactors, which had experienced explosions since last Friday, were gradually being stabilised.
However two workers are missing at the complex after yesterday’s explosion and a crack is reported in the roof of the number four reactor this morning.
The news will further undermine the fragile confidence in Japan.
A magnitude 6.2 quake rattled parts of eastern Japan late last night. That could have caused damage of up to $US2 billion according to early estimates, on top of the $US100 billion for last Friday’s quake and tsunamis.
After a quiet start to the day yesterday, the Australian market shed tens of billions of dollars in value in the afternoon session after the situation in Japan worsened.
But the US sell off eased, especially after the Fed made more upbeat comments about the state of the US economic recovery in its post meeting statement.
The Dow was down close to 200 points in early trading, but pulled back gradually to end off 137 points or 1.1%.
Similar falls were reported for the S&P 500 and Nasdaq.
Commodities slumped, led by gold, oil, copper and grains. The Reuters Jefferies Commodities Index, fell a whopping 3.56%.
The Australian markets finished off 2.1% or $30 billion in value lower in the worst fall in nine months
Japanese stocks dropped 14.5% to below 8,500 on the Nikkei in the worst fall in 24 years before recovering at the end to close off 10.5% at 8605.15.
European markets also fell sharply with the German market off nearly 4%, London down 1.4%.
Commodities also fell again with Nymex WTI oil down sharply, losing 3.5% in value of $US3.61 a barrel to close in New York at $US97.58, the lowest since late February.
Comex May copper fell 5 cents, or 1.2%, to $US4.14 a pound, the lowest close since mid-December.
Grain futures again fell in Chicago.
Japanese Prime Minister Naota Kan said radiation levels at the Fukushima Daiichi complex of six reactors had become high, deepening concerns about the economic cost of the disaster.
Shares in Tokyo Electric fell another 24% yesterday after a similar fall on Monday.
That’s a near halving in value in two days and Moody’s put the struggling power giant on notice for a possible downgrading of its credit standing.
Futures on the Dow were down more than 230 points, or 2% in Asian trading yesterday.
Yesterday’s fall means the Japanese market is now down more than 16% since Monday. Including last Friday’s late fall, the Tokyo market has fallen 18% in value.
That puts the Tokyo market firmly in the correction stage.
Hong Kong’s market was off nearly 3%, Taiwan’s Taiex was off 3.4%, China’s Shanghai Composite dropped 1.4%, Australia’s ASX 200 fell 2.1% and South Korea’s Kospi fell 2.4%.
After Mr Kan’s comments, Nikkei equity futures prices dropped sharply, triggering a circuit breaker to halt trade.
When it resumed, the futures were down more than 12% on the day and that deepened to a 20% fall.
Trading in Nikkei futures on the smaller Osaka exchange was suspended briefly in the afternoon by regulators.
Another reactor explosion and then a fire at a fourth reactor, thought to have been successfully put off line and out of operation, stunned markets.
That fire was brought under control several hours later.
The government widened the evacuation zone around the stricken reactors at Fukushima.
The government introduced a 30 kilometre no fly zone around the stricken reactors and China Air said it was suspending flights to Tokyo from Beijing and Shanghai.
And Japanese Prime Minister, Naota Kan warned people around the Fukushima reactors of Tokyo Electric Power Company to remain in doors while radiation levels soared to potentially harmful levels.
The ASX 200 index slumped as much as 3% on Mr Kan’s comments and ended down 97.7 points, or 2.1%, at a six-month low of 4528.7.
The All Ordinaries Index lost 100.2 points, or 2.1%, to 4609.9. The drop wiped about $30 billion off the sharemarket’s value.
The Australian dollar fell about 1.5% to 99.6 US cents in Asia and then dropped to around 99 USc in European and US dealings.
It was the worst hit currency in yesterday’s volatile trading.
(A benign set of minutes from the latest Reserve Bank board meeting helped weaken the $A).
Locally, investors dumped uranium shares for a second day. Paladin Energy fell 69 cents, or 17.5%, to $3.26. Peninsula Energy fell 2.6 cents, or 30.6%, to 5.9 cents and ERA was off 14.3%, or $1.18 at $7.07.
ERA has lost more than a quarter of an already shrunken value in
