Nikkei, Topix Hit 2-Year Lows on Kan's Warning
Japanese shares plunged on Tuesday as fresh explosions rocked a damaged nuclear plant and triggered a rise in radiation levels, sending investors fleeing from riskier assets such as equities and commodities across Asia.
The benchmark Nikkei 225 stock index extended its early slump after Prime Minister Naoto Kan said radiation levels at the plant on the northeast coast had risen and urged people within a 30-km (18 mile) radius of the facility to stay indoors.
One report said "minute" levels of radiation had been detected in Tokyo.
So far this week, $720 billion in market value has been wiped off the Tokyo stock exchange's biggest companies in the wake of a massive earthquake and tsunami which hit the country on Friday, triggering the nuclear crisis.
Asian share markets had initially posted modest losses in response to Tokyo's slump, but then turned sharply lower with the benchmark South Korean index falling 3 percent. Australian shares dropped 2.6 percent and Hong Kong about 4 percent.
The FTSE CNBC Asia 100 Index , which measures markets across Asia, was skidding 4.5 percent.
Japanese stocks plummeted 10.6 percent, posting the worst two-day losing streak since 1987, on reports of rising radiation near Tokyo, suggesting any deterioration at a quake-hit nuclear plant could trigger more panic selling led by hedge funds.
The yen tripped on talk of intervention and bond yields rose as investors sold debt to offset losses in the stock market. The scale and speed of the equity selloff, on record volume for a second day running, forced fund managers to sit on the sidelines.
At one point the broader Nikkei plunged 14 percent after Prime Minister Naoto Kan said the risk of nuclear contamination was rising at the Fukushima Daiichi complex on Japan's ravaged northeastern coast, 240 km (150 miles) north of Tokyo.
In contrast to Monday's trading, when construction stocks rose, none of the 225 constituents of the benchmark Nikkei average gained on Tuesday.
The Nikkei share average dropped 10.6 percent to 8,605.15, the biggest percentage loss since the global financial crisis of 2008. The TOPIX share index plummeted 12.1 percent to 743.10, after posting the biggest full-day decline since the 2008 financial crisis on Monday on record volume.
During the trading day Japanese officials tried to calm the market to little avail and took measures to reduce short selling, such as placing limits on broker sales of stocks for arbitrage trading.
Shares of Tokyo Electric Power, the owner of the stricken nuclear plant, did not trade, although sellers massed at the indicated price of 1,221 yen on Tuesday. There were no buyers at that price.
The utility's credit default swap spreads, contracts that protect against debt default and restructuring, were at 190 basis points, exploding from 40 basis points on Friday and indicating nervousness about the company's future. Separately, the company has also been placed on 'negative' creditwatch by ratings agency, S&P.
Australia Stocks Fall to Over 6-Month Lows
Australian shares fell 2.1 percent to their lowest close in over six months as Japan's nuclear crisis deepened, sending equity markets into a tailspin across Asia.
The benchmark S&P/ASX 200 index fell 97.7 points to 4,528.7, its lowest close since Sept 1.
Shares of Australia's uranium miners, which provide a key fuel for nuclear reactors, fell further on safety concerns and talk that several countries were rethinking plans for nuclear power.
Paladin shares were down 17.5 percent after Monday's 16.5 percent drop while Energy Resources of Australia, a unit of global miner Rio Tinto fell 14.3 percent on top of Monday's 12.2 percent drop.
Extract Resources, which owns a promising 257-million pound resource in the southern African nation of Namibia, dropped 18.5 percent after a 7.7 percent loss a day earlier.
Origin Energy was placed on trading halt. The company launched a $2.3 billion share sale to help pay down debt from its acquisition of two power businesses last year and fund further potential acquisitions.
Miners and energy firms, which lent support earlier on expectation of demand from reconstruction in Japan and a switch to other forms of energy fell after the announcement from Japan, the country's second-largest export destination. Rio Tinto fell 2.2 percent, and BHP Billiton fell 2.5 percent.
Top banks fell with No.2 Commonwealth Bank of Australia leading with a 1.6 percent fall. Investors feared further global turmoil will increase their cost of funds further.
Insurers fell on fears the sequence of natural calamities in the Asia Pacific region will drive up reinsurance costs. Insurance Australia Group led losses, dropping 2.4 percent.
New Zealand's benchmark NZX 50 index fell 1.4 percent to end at 3,314.1.
Seoul shares ended down 2.4 percent, hit by worries about nuclear radiation leaks in Japan, but off an earlier loss of as much as 4.5 percent as refining and alternative energy issues outperformed.
The Korea Composite Stock Price Index (KOSPI) finished down 47.31 points at 1,923.92, managing to contain falls despite the Nikkei's 10.6 percent drop.
News Japan warned that radioactive levels had become "significantly" higher around a quake-stricken nuclear power plant on Tuesday after explosions at two reactors, sending the market to as low as 1,882.09 points.
Major blue chips lost ground. Samsung Electronics, the world's No.1 memory chip maker, fell 4.4 percent. POSCO, the world's No.3 steelmaker, declined 3.5 percent.
Nuclear power issues also tumbled, with plant designer KEPCO Engineering & Construction declining 12.7 percent, and KR Plant Service & Engineering shedding 7.9 percent.
Refiners continued to outperform as the shutdown of refineries in Japan pointed to tighter supply and better pricing. SK Innovation, the country's No.1 crude oil refiner, ended flat, while S-Oil, the No.3, edged down 0.7 percent.
Alternative energy issues jumped as investor interest in alternative energy sources deepened amid heightened worries about the safety of nuclear power facilities after explosions in Japan.
Polysilicon maker OCI jumped 4.3 percent and Taewoong a wind power equipment maker, rallied 3.8 percent.
Tourism issues and shipbuilders bounced after steep falls in the previous session. Hana Tour Service rose 0.5 percent, and Daewoo Shipbuilding & Marine Engineering climbed 0.5 percent.
Shanghai Posts Lowest Close in Over 2 Weeks
China's main stock index closed down 1.4 percent, as worries that China's central bank will continue to drain funds from the financial system added to fears about Japan's nuclear crisis.
The benchmark Shanghai Composite ended at 2,896.3 points, its lowest close in more than two weeks.
Coal miners led losses on easing oil prices, with Yanzhou Mining tumbling 5 percent, while China Shenhua eased 2.7 percent.
Hong Kong stocks stumbled in heavy volume, with investors dumping large caps and index futures as Japan's nuclear problems worsened.
Ping An Insurance fell 6.1 percent and was the top loser on the benchmark after the company sold $2.5 billion worth of shares at a discount in a private placement.
The benchmark Hang Seng Index ended down 2.86 percent at 2,678.3.
In Southeast Asia, Malaysia's KL Composite and Singapore's STI both ended lower, down 0.8 percent and 2.8 percent, respectively.