Nikkei drops 5 in morning trade

The Nikkei has experienced another sharp dip.


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By :  ,  Financial Analyst

The Nikkei has fallen by more than five per cent in this morning's (May 30th) trading.

It is now up 38 per cent on the start of 2013, but the index has fallen by more than ten per cent in the last two weeks to drop away from the five-and-a-half year highs that were recorded earlier in the month.

European stock markets are expected to edge higher despite the fall on the Nikkei, according to a report by Reuters, with indexes predicted to open around 0.4 per cent up on last night's close.

This is the second time in less than a fortnight that the Nikkei has suffered a sharp dip, as it was down by more than seven per cent on one day last week.

"Speculation about the Fed may be affecting markets in Asia which have been rallying on funds flowing in as a result of the Fed's stimulus," particularly in Hong Kong, said Hirokazu Yuihama, a senior strategist at Daiwa Securities in Tokyo.

This morning's dip for the Nikkei is in contrast to yesterday morning, when it was up 0.1 per cent after a period of choppy trade.

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