Tokyo Market Plunges on Nuclear, Power Supply

Martyn Williams | Tokyo March 15, 2011 - Tokyo's stock market dropped sharply on Tuesday, fueled by fears about the worsening conditions at a nuclear power plant north of Tokyo and electricity supply problems.

The benchmark Nikkei index of major stocks registered its third largest fall ever, dropping more than 10 percent. Trading volume on the Tokyo market's first section was a little under six billion shares, hitting a record high for the second straight day.

The selling was across all industries, but electricity and gas companies led the way. Tokyo Electric Power Company, the operator of the nuclear plants, fell by the maximum allowable amount in a flood of sell orders.

Major manufacturing companies also saw losses. Investors are worried about the damage incurred by Friday's earthquake and tsunami and problems caused by continuing power rationing.

Toyota has halted all domestic assembly lines until at Wednesday; Sony has shut down six plants, including one that was flooded by Friday's tsunami; and, Toshiba says it is uncertain when a chip plant in northern Japan will reopen.

Mitsuru Yonekawa, a spokesman for car-maker Nissan, says the company plans to reopen plants, later this week.

"We have to check all the lines and facility itself, and of course we have some supply shortage," Yonekawa said.

Planned rolling electricity blackouts, which began on Monday and could continue for more than a month, are to help cope with a 27 percent drop in generation capacity as the result of nuclear power stations being offline. They will be extended to areas of northern Japan, Wednesday.

Disruption to fuel supplies are bringing further problems for companies. Queues grew outside central Tokyo gas stations on Tuesday and some were closed because delivery trucks had not arrived.