Stocks closed sharply lower Monday because of concern over the Persian Gulf crisis, with the Nikkei index suffering its seventh biggest loss in history and closing at its lowest level since September, 1988.
The index was off 1,153.12, or 4.2%, at 26,176.43 after shedding 289.18 points Friday. Before the close, it dipped under 26,000 for the first time since March, 1988.
Early today, the Nikkei rebounded a bit, then slumped another 211.40, or 0.8%, to 25,965.03 by late morning.
On Monday, thin volume made share prices sensitive to waves of selling that flooded the market most of the day.
"People in the market were not panicking," said Daniel Marull, a broker at Sanyo Securities Co. "But there was a lot of selling."
He added that the selling might continue today as players try to cut their losses.
"The Nikkei has been dropping almost every day," said a broker at a foreign house. "There is a growing number of people who think it will fall to levels that were inconceivable only a year ago. They say it could fall as low as 23,000 or 22,000."
In other foreign trading Monday:
* In London, stocks closed down but off the day's low in quiet trading dominated by concern over the Persian Gulf situation. The Financial Times-Stock Exchange 100 index ended down 14.3 points at 2,219.5, off the low of 2,206.5.
* In Frankfurt, West Germany, shares ended at a 1990 low. The 30-share DAX index fell throughout trading to close 43.29 points, or 2.5%, lower at 1,706.05.
* In Paris, shares also tumbled to a closing low for the year. The CAC-40 index finished down 48.86 points, or 2.76%, at 1,721.01 after hitting a low of 1,705.62.
* In Taiwan, stocks closed at their lowest level since April 25, 1988, with the weighted index shedding 229.74 points, or 5.58%, to 3,884.89 in thin trading.
* In Hong Kong, the Hang Seng index ended 38.69 points lower at 3,040.28.