Japan earthquake drives down major European markets at close. US stocks at midday also down as investors try to evaluate impact of new 7.4 magnitude Japan earthquake.
News of another Japan earthquake and tsunami hurt global stock markets Thursday, wiping out gains made earlier, when investors had brushed off the European Central Bank's first interest rate increase in nearly three years and Portugal's request for a bailout.
Confirmation that a magnitude 7.4 earthquake struck off the already-battered northeastern coast of Japan led to a knee-jerk sell-off in Europe and the U.S. However, markets steadied somewhat as investors concluded that the 7.4 quake was far smaller than the 9.0 quake from March 11 and that the tsunami would only be one meter high, compared with ten meters high a month ago.
"This story will most likely be the key driver of sentiment for the rest of the day as we receive more news from Japan," said Will Hedden, a sales trader at IG Index.
Before news of the quake, stocks in Europe had been trading higher while those in the U.S. were more or less unchanged.
The market response showed how nervous investors are about the situation in Japan, particularly with regard to the damaged Fukushima nuclear plant.