Japan's Nikkei average tumbled over 5 percent at one point on Monday as investors shifted to safer assets following after Friday's massive earthquake and tsunami, with the long-term impact uncertain as nuclear disaster looms.
The Nikkei 225 have since pared back some losses to trade 4.8 percent lower at 9,756.2 points. The broader Topix sank 7 percent to 851.2.
Investors' sentiment soured by Sunday night, as Japan scrambled to avert potentially disastrous meltdowns at two nuclear reactors and the extent of the total damage unclear.
The government on Sunday said there was a risk of a fresh explosion at the Tokyo Electric Power's (TEPCO) Fukushima Daiichi nuclear plant, some 240 km (150 miles) north of Tokyo, after the roof blew off another reactor building the previous day.
Tokyo Electric Power was untraded on a glut of sell orders 200 times the number of bids. Shareholders were asking 2,071 yen per share, 2.4 percent lower than Friday's closing price.
Japan's biggest utility has battled to cool damaged reactors at its Fukushima plant damaged by the quake and subsequent tsunami on Friday, forcing it to vent radioactive gas to relieve pressure inside the reactors. TEPCO from Monday plans to cut power to some areas to cope with demand on its diminished generating capacity.
Market players believed that a long-term rebound for stocks may take much longer than after the 1995 Kobe earthquake. They noted that holdings by foreigners, who deal heavily in large-cap stocks affected by the quake, account for more than 60 percent of the total market. In 1995, they accounted for 29 percent.
The Nikkei fell 8 percent in the first five days after the 1995 earthquake that devastated Kobe and its vicinity. But it rose 5 percent during the next 10 days, therefore history suggests that this earthquake will not likely derail the whole economy.