Nuclear panic sends sharemarkets plunging

Stocks on Wall Street plunged for a second day as Japan’s nuclear power crisis sent investors scurrying again for safety.

Worldwide, sharemarkets also fell, led by an 11% plunge in the Tokyo market as the government warned of radiation fallout from the stricken Fukushima power station.

The panic selling was based on fears a nuclear catastrophe would further complicate and endanger the nation's recovery from its worst earthquake on record.

Investors also weighed up the global economic consequences of reduced industrial production in Japan from power outages and disruption to transport networks.

At the close (9am NZ time), the Dow Jones Industrial Average was down 137.74 points, or 1.2%, to 11,855.42, while the S&P 500 index lost 1.2%, to 1281.87.

Stocks had initially tumbled more, with the Dow posting its biggest intraday loss of the year, before slightly paring its slide in late morning trading.

General Electric dropped 3.9% to lead the declines, amid concerns about the company's involvement in the design of all six reactors at the Fukushima plant.

Technology and industrial stocks posted the heaviest losses. Alcoa fell 2.6%, Intel declined 3.6%, Caterpillar shed 2.1% and 3M lost 2.9%.

Insurers were also under pressure as concerns grew about the rising costs in Japan. Aflac fell 9.6%, Hartford Financial shed 6%, MetLife dropped 5.1% and Prudential Financial fell 5.6%.

The Nasdaq Composite, meanwhile, was down 1.3%, to 2667.33.

Other markets: Japan falls most since 2008
In Tokyo, the Nikkei Stock Average finished 11% lower at 8605.15 after sliding more than 14% earlier in the day, pressured by news of further explosions and potential radiation fallout at Tokyo Electric Power Co.'s Fukushima Daiichi plant.

Coming on top of a 6.2% fall on Monday, the performance is the Nikkei's worst since its October 16, 2008, drop of 11.4%, in the aftermath of the global financial crisis.

Hong Kong's Hang Seng Index tumbled 2.9% 22,678.25, China's Shanghai Composite lost 1.4% 2896.26, Australia's S&P/ASX 200 shed 2.1% 4528.73, Taiwan's Taiex skidded 3.4% to 8234.78 and Korea's Kospi gave up 2.4% to 1923.92, while India's Sensex fell 1.5% 18,167.64.

European stock markets also fell sharply, with the Stoxx Europe 600 index closing down 2.3% at 266.32, after losing 1.1% on Monday.

The German DAX 30 index was the biggest decliner among top regional indices, losing 3.2% to 6647.66. The French CAC 40 index finished down 2.5% at 3780.85, while the FTSE 100 index dropped 1.4% to 5695.28, paring earlier losses.

Commodities: Oil, gold down
Crude-oil futures tumbled as Japan worked to control a nuclear crisis that could disrupt the economy of the world's third-largest oil consumer.

Light, sweet crude for April delivery traded $US2.41, or 2.4%, lower at $US98.78 a barrel in New York, after falling as low as $US96.71 earlier in the session. Brent crude on the ICE futures exchange fell $US3.42 to $US110.25 a barrel.

Investors shed gold in favour of cash as steep declines in equities markets and uncertainty over Japan sparked a flight to the sidelines.

The most actively traded contract, for April delivery, was down 2.4%, or $US34.80, at $US1390.10 an ounce in New York. The contract hit a low of $US1380.70 as floor trading opened.

Currencies: Safe havens gain
Traders flocked to safe havens such as the US dollar, the Swiss franc and even the yen as nuclear panic spread through financial markets.

The traded recently at $US1.3966 from $US1.3999 late on Monday in New York. The dollar was at ¥80.64 compared with ¥81.69, while the euro was at ¥112.63 compared with ¥114.22.

The yen scored strong gains against currencies that trade in close correlation with risk appetite, such as the Australian, Canadian and New Zealand dollars.

The Australian dollar fell 3% versus the Japanese currency to change hands at ¥80.01.

The pound fell 1.6% against the yen to ¥129.99 and was also sharply lower against the dollar at $US1.6077 from $US1.6184.