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Nikkei down in early trade after massive losses

Nikkei down in early trade after massive losses

Japan's key stock index edged down in early trade Tuesday, extending further losses after it plunged to a 26-year-low on growing pessimism over the outlook for the global economy.
The benchmark Nikkei 225 index fell 67.86 points, or 0.95 percent, to 7,095.04 as of 10:00 am (0100 GMT) Tuesday. Earlier, the Nikkei rose almost 1 percent, but sentiment quickly turned downbeat on lingering fears over a global downturn and concern over weak Japanese corporate earnings.
"Fears over a global slowdown remain intact. We are seeing selling of banking shares on worries over their weakening capital reserves," said Kazuhiro Takahashi, equity strategist at Daiwa Securities SMBC Co. Ltd.
Sluggish trading follows Nikkei's plunge Monday to a 26-year-low as jittery investors dumped export-linked shares on the back of a strong yen. Pessimism over Japanese corporate earnings and ongoing fears over a global recession weighed on the market.
The Tokyo trading also comes after the Dow Jones industrial average sank more than 2 percent Monday as tight credit erased budding optimism about a housing sector recovery amid sustained worries over a protracted economic downturn.