Shares slump over fears for world’s third-largest economy after disaster

Tokyo’s Nikkei 225 index closed more than 6 per cent lower and some of the world’s biggest firms, such as Toshiba, Toyota and Honda, sustained heavy share price losses as investors in the aftermath of the earthquake, tsunami, and nuclear crisis.

It is thought the quake alone may have caused $22bn (£13.4bn) of damage, while there were fears of major disruption to factory output due to power shortages.

Despite the slump, London investors refused to hit the panic button as the FTSE 100 Index stood 0.3 per cent lower at around 5810. However, this masked fluctuations for individual stocks, with a number of Lloyd’s of London insurers and luxury goods firm Burberry sharply lower.

Brent crude prices dropped to around $111 a barrel at one stage on expectations that weaker Japanese economic output will depress demand for crude.

However the price of gas leapt 7 per cent as fears mounted that imports to Britain would be hit as cargoes are diverted to Japan.

The prospect of higher gas prices saw shares in Drax up by as much as 7 per cent. But Amec, which provides services to the nuclear sector, suffered a 2 per cent drop.