Stocks rebound in Tokyo bourse
Japanese stocks have bounced back on Thursday morning, with the key index rising 2% after heavy losses the day before in a session shortened due to a massive sell-off sparked by a probe of internet start-up Livedoor Co.
The benchmark Nikkei 225 index gained 310.24 points, or 2.02%, to end morning trading at 15,651.42 points.
The index dropped 464.77 points, or 2.9%, its biggest one-day drop since 10 May, 2004. Adding in a 2.8% drop on Tuesday, the index had a two-day loss of nearly 6%.
The market was lifted largely by bargain hunters targeting technology stocks battered in the two previous days’ sell-offs, including Softbank Corp, which jumped 13% to 3760 yen ($32.6), and Yahoo! Japan, which rose 11.5% to 165,000 yen ($1434.8).
Crash
The market’s plunge on Tuesday and Wednesday was triggered by an investigation into allegations that internet company Livedoor Co had violated securities laws by giving false information. The company has denied any wrongdoing.
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A probe into Livedoor triggered |
The Tokyo Stock Exchange, which closed trading 20 minutes early on Wednesday due to concerns its computerised trading system could not handle the trading volume, plans to start the afternoon session 30 minutes later than usual, at 1.00 pm (0600GMT) in anticipation of increased trading volume.
As the market got flooded with orders on Wednesday afternoon, the bourse issued a warning it would stop trading if the system capacity limit of 4 million transactions was reached. When it reached 3.5 million about an hour before the session’s close, it announced it would close early.
Transactions
The exchange said transactions totalled 1.3 million in the first hour of trading on Thursday morning. Trading volume is usually a far higher number – often in the billions – because each transaction typically involves many shares.
The Tokyo bourse is considering delisting Livedoor over the scandal, the Mainichi newspaper reported on Thursday.
Media reports say Livedoor was suspected of concealing a 1 billion yen ($8.7 million) loss for full-year results ending September 2004.
The company that Livedoor’s chief executive Takafumi Horie started in 1997 offers various internet services, including consulting, telecommunications, mobile sites and software development. It also has bought up chunks of other companies and managed to raise money by offering more of its own stock.