Tokyo Stock Market Likely to Hold Steady
THE specter of the October 1987 world share crash stalked the Tokyo stock market Monday, but economists and market experts said the chances of another global collapse were slim. In the world's biggest stock market, the key 225-share Nikkei index ended down 647.33 points, or 1.84 per cent, at 34,501.76, following Wall Street's 191-point plunge Friday.
Market experts here said Tokyo could likely avoid a major collapse this week even if New York plummeted again. ``Tokyo at the end of the day has a much better chance of holding the line than any other market because of all the safety features built into the market,'' said a strategist at Barclays de Zoete Wedd Securities (Japan).
The features include financial authorities' ability to persuade institutions not to dump shares, ``circuit breakers'' that halt trade in individual issues when they fall a certain amount, and cross-held shares in the hands of ``stable shareholders'' unlikely to sell in a panic. Tokyo's fall was far smaller than its plunge of 14.9 percent on October 19, 1987.
Although Japanese interest rates have been rising, several analysts said interest rate concerns had already been largely factored into the Tokyo market before Friday's Wall street shock.