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Market Update

Nikkei's 4.6% Plunge Extends Correction Beyond 10%

Author: Hiruki Nakamura
Last Update: 1:49 PM ET August 24 2015

4:30 PM Tokyo Ė Nikkei average in Tokyo plunged 4.6% following Asia-wide correction for the second week in a row. The reference index has now fallen more than 10% from the 2015-high. Shanghai index plunged 8.4% and turned negative for the year.

Worldwide sell-off dragged market averages in Tokyo for the second week after indexes in Shanghai dropped sharply and in overnight trading stocks plunged in New York and in Europe.

The Nikkei 225 Stock Average tumbled 895.15 or 4.6% to 18,540.68 and the broader Topix index declined 92.14 or 5.9% to 1,480.87.

The yen eased to 121.03 against a dollar.

World markets have been fragile for the several month on the stretched valuations in developed markets, weakening commodities prices and lack of growth in the euro zone.

In addition, emerging markets suddenly faced currency war after China devalued currency two weeks ago and foreign investors are estimating that the economy is slowing down faster than the government data suggest.

Shanghai SSE Composite Index plunged 8.4% and fell in the negative territory for the first time in the year. The index has not plunged 40% from the peak in June and is down 0.8% year-to-date.

Stocks in Review

Kuroda Electric Co Ltd plunged 8.3% to 2,156 yen after the electrical and electronic equipments makerís shareholders rejected proposal to appoint activist investor Yoshiaki Murakami and four outside directors to the company''s board.

Ryohin Keikaku Co Ltd declined 6.1% to 23,960 yen after the Nikkei news said self-brand goods retailerís revenues in the first-half ending in August to soar 21% to 150 billion yen, higher than the earlier estimate of 142 billion yen.

Operating profit to surge 38% to 16 billion yen. For the year ending in February 2016, the company forecasted operating profit to jump 34% to 32 billion yen.

Toyota Motor Corp plummeted 6.8% to 6,994 yen after the auto maker plans to buy 13 million airbags from smaller rival Nippon Kayaku Co, to reduce its risk from potentially lethal air bag inflators Takata Corp for estimated cost of between $100 million and $150 million.

Sources: Data collected by 123jump.com and Ticker.com from company press releases, filings and corporate websites. Market data: BATS Exchange. Inc