Nikkei sinks 6.4 pct to lowest close since April 3

Nikkei sinks 6.4 pct to lowest close since April 3
Business & Markets 2013
Written by Reuters
Thursday, 13 June 2013 14:20

TOKYO (June 13): The Nikkei average tumbled 6.4 percent on Thursday, hitting its lowest close since April 3 - the day before the Bank of Japan unveiled sweeping stimulus to revive the economy - as investors further cut their long Japanese equities and short yen positions.

Investors, mainly hedge funds, have been cutting such positions on concerns that the U.S. Federal Reserve will scale back its massive stimulus and after the Nikkei had rallied more than 80 percent from mid-November to its 5-1/2 year peak hit on May 23.

The index has fallen nearly 22 percent since that multiyear high, entering a bear market.

The Nikkei closed down 843.94 points at 12,445.38 on Thursday, below the Ichimoku cloud for the first time since mid-November, when Prime Minister Shinzo Abe promised expansionary fiscal and monetary policies to reignite the world's third-largest economy.

Traders said the drop in both the Nikkei and the broader Topix index to below their 100-day moving averages triggered stop losses, prompting further selling in index futures.

The Topix sagged 4.8 percent to 1,044.17 in relatively light trade, with volume at 82 percent of its full daily average for the past 90 trading days. - Reuters