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That sinking feeling

March 15, 2011

European shares opened sharply down on Tuesday after stocks in Tokyo plummeted more than 10 percent amid signs that Japan's nuclear crisis is intensifying.

A distresed trader makes a phone call
Frankfurt's DAX index has taken a beatingImage: picture-alliance/ dpa

European shares fell to their lowest level in 14 weeks on Tuesday morning as Japan warned of significantly higher radiation levels following explosions at one of its quake-stricken nuclear power plants.

Concern about the wider economic impact of the disaster saw markets in London, Paris and Milan each dive more than 3 percent in early trading. Frankfurt shed 4.5 percent, while the stock exchange in Tokyo itself closed 10 percent down.

"The market will do its best to price in the worst-case scenario and we will move forward from there," said Keith Bowman, equity analyst at UK-based financial services company Hargreaves Lansdown.

"But the situation is very fluid and changing from hour to hour, and we have also got events in the Middle East to consider."

Winners and losers

Utilities stocks were among those hit hardest as the German government cast doubts about the future of the nation's atomic energy industry and Switzerland put on hold some approvals for nuclear plants.

Shares in E.ON, the world's biggest energy company by sales and one of Germany's leading nuclear power operators, dropped 5.6 percent on Tuesday morning after shedding more than 5 percent on Monday.

Rival company RWE lost 5.6 percent on Tuesday morning after dropping 4.77 percent on Monday.

Meanwhile, stocks in renewable energy companies soared. Shares in the German solar power group Conergy rocketed up by a staggering 90 per cent before retreating to gains of about 66 percent.

German wind energy company Nordex and solar giant SolarWorld both rose roughly 18 percent, with trading volumes exceeding six times their 90-day average.

Author: Sam Edmonds (dpa, Reuters)
Editor: Nathan Witkop

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