NIKKEI LOGS 3RD-LARGEST DROP IN HISTORY AMID MIDDLE EAST CONFLICT

TOKYO, March 9 (Bernama-Kyodo) -- Tokyo stocks plunged Monday, with the Nikkei index losing over 2,800 points and marking the third-largest point drop in history, as crude oil futures surged amid growing prospects of a prolonged Middle East conflict, Kyodo News reported.

The 225-issue Nikkei Stock Average ended down 2,892.12 points, or 5.20 per cent, from Friday at 52,728.72. The broader Topix index finished 141.09 points, or 3.80 per cent, lower at 3,575.84.

On the top-tier Prime Market, the main decliners were nonferrous metal, glass and ceramics products and machinery issues.

The U.S. dollar mostly stayed in the upper 158 yen range in Tokyo amid concerns about the impact of surging crude prices.

At 5 pm, the dollar fetched 158.45-47 yen compared with 157.79-89 yen in New York and 157.52-55 yen in Tokyo at 5 pm Friday.

The euro was quoted at US$1.1563-1565 and 183.22-26 yen against US$1.1613-1623 and 183.22-32 yen in New York and US$1.1614-1615 and 182.96-183.00 yen in Tokyo late Friday afternoon.

The yield on the benchmark 10-year Japanese government bond ended up 0.025 percentage points from Friday's close at 2.185 per cent as worries about inflation grew with the rise in oil prices.

Expectations for an early resolution of the conflict receded after reports that President Donald Trump has shown interest in deploying US ground troops inside Iran, dealers said.

The appointment of Mojtaba Khamenei as Iran's supreme leader, announced Monday following the killing of his father, Ayatollah Ali Khamenei, also raised fears that the military conflict and the surge in crude oil prices could be prolonged, they said.

"There is a view that even if the top leader changes, Iran's religious regime is unlikely to change drastically," said Wataru Akiyama, strategist in the Investment Content Department of Nomura Securities Co.

The benchmark West Texas Intermediate crude oil futures contract temporarily surpassed US$119 per barrel in New York on Sunday, the highest level since June 2022, as the Middle East conflict continues to escalate. It ended below the US$100 mark on Friday.

"The market already seems to be factoring in four or five more weeks (of the conflict), or even longer, as President Trump has said," according to Masahiro Ichikawa, chief market strategist at Sumitomo Mitsui DS Asset Management Co.

The Nikkei stock index briefly fell by more than 4,200 points, with all sectors facing selling pressure. Still, the declines were trimmed in the afternoon following a report that finance ministers of the Group of Seven will discuss the possibility of a joint release of stockpiled oil.

The decline in heavyweight technology shares, which were surging until February, weighed on the market.

-- BERNAMA-KYODO