By Marcus Leach
It was feared that the Japanese earthquake and subsequent tsunami would have long-lasting ill effects on the country’s stock market, but the Nikkei 225 Index began a recovery of sorts on Wednesday.
A gain of 5.7 per cent saw the Index close at 9,093.72 points, having seen its biggest drop for twenty-three years on Monday and Tuesday as it lost 16 per cent.
With investors looking for bargains it was stocks of car companies, exporters and financial companies that profited the most, which will come as a relief seeing as they were the hardest hit in the aftermath of the earthquake and devastating tsunami.
Not only did the Nikkei 225 Index improve, but it had a knock on effect for other local markets. Seoul’s Kospi Index finished 1.8 per cent up, and in Australia shares finished the day 0.7 per cent up.
The belief from experts is that once the potential nuclear disaster is dealt with the market will return to a degree of normality.
"Once the nuclear plant problem is cleared out of the way, the market will go back to the level from before that panic sell-off," said Makoto Kikuchi of Myojo Asset Management.
So while the market is still volatile, there is definite hope of recovery if the nuclear plants can be contained.
"The market is still extremely volatile," said Norihiro Fujito of Mitsubishi UFJ Morgan Stanley Securities.
"All eyes are on the nuclear plant and the Nikkei will move according to the news about the plant," he added.