Much of the same from the Nikkei as declines continue

The Nikkei 225 has continued to decline during early trading on Monday. The index opened at 13,551.36 coming off the back of a turbulent period of trading last week and then proceeded to tumble for much of the sessions early trading, reaching 13,387.02 by 2:56 am (BST). Seasoned veterans will have been hanging back during this period as it is well known that a lot of emotional trading takes place during the first hour of a session.

The fall represented a retreat of more than 2.8% from Friday’s closing price of 13.774.54 and now means that the Nikkei has fallen by more than 16% from the peak of the recent rally, which now seems to have grinded to a halt on the back of concern in the US around its quantitative easing.

The Federal Reserve is considering the option of winding up its monetary easing policy if the US economy is showing signs of recovery, which has left investors in two minds as to whether positive economic data from the worlds largest economy is actually good news for them.

Securities companies were the worst hit during early trading, as the group continued to fall heavily with the index — declining by almost 7% during the morning. Loss leaders in this sector included Daiwa Securities Group, who fell by 8% by midday and Nomura Holdings, which slid by almost 7% during the same period.

Fast Retailing, one of Asia’s biggest retailing exporters, had fallen by 5.4% at the time of writing and looked likely to continue to plummet as investors began to sell off the biggest stocks on the index through fear of technical correction.

The Topix, the broader benchmark, had fallen by 2%, underpinning the fragile situation in the far east.