Nikkei marks 11-week closing low as hit by euro fall
Thursday, 20 May 2010
TOKYO, May 19 (Reuters): Japan's Nikkei average fell 0.5 per cent to a nearly three-month closing low Wednesday as worries about tighter US and German financial rules rattled markets, spurring selling in the euro and other riskier assets.
But short-covering helped the benchmark pare losses that earlier took it down nearly 2 per cent.
Germany's sudden move to ban naked short selling in some securities and news that several Republicans will vote with Democrats to wrap up debate on sweeping financial reform sent US stocks lower.
Naked short selling is when a trader sells short a financial instrument he does not possess, betting that its price will fall, without first borrowing the instrument or confirming if it can be borrowed.
"The concern is that the tighter regulations could spread throughout Europe, and this of course has spurred risk aversion," said Toshiyuki Katayama, a market analyst at Monex Inc.
But short-covering helped the benchmark pare losses that earlier took it down nearly 2 per cent.
Germany's sudden move to ban naked short selling in some securities and news that several Republicans will vote with Democrats to wrap up debate on sweeping financial reform sent US stocks lower.
Naked short selling is when a trader sells short a financial instrument he does not possess, betting that its price will fall, without first borrowing the instrument or confirming if it can be borrowed.
"The concern is that the tighter regulations could spread throughout Europe, and this of course has spurred risk aversion," said Toshiyuki Katayama, a market analyst at Monex Inc.