Quake hits stocks, but yen holds on
European shares dropped to a three-month low today, with sentiment worsening after a massive quake in Japan and on growing unrest in the Arab world, though analysts said equities had potential to bounce back.business Updated: Mar 12, 2011 01:30 IST
A major earthquake in northeastern Japan hit world stocks and oil prices on Friday, but the yen proved resilient to one of the bigger tremors the country has suffered in recent times.
The quake, which struck towards the end of the Asian trading session, prompted a renewed bout of selling in stock markets, with insurers hit badly, and a kneejerk sell-off in the yen. However, the Japanese currency recovered somewhat, thanks to its status as a safe haven for international traders.
Derek Halpenny, European head of global currency research at The Bank of Tokyo-Mitsubishi UFJ said, "Of course initial uncertainty that could prompt risk aversion may in fact help lift the yen in the short-term."
By early afternoon London time, the dollar was trading 0.8% lower at 82.29 yen, having risen as high as 83.29 yen in the immediate aftermath of the quake. Japanese stocks, though, were hit hard and the benchmark Nikkei 225 index closed down 1.7% at 10,254.43.
Losses were posted all round Asia and in early trading in Europe.