Tokyo Shares Dive

New York dips slightly at opening.

Investors in Tokyo took the lead of their U.S. counterparts and pushed shares in the Nikkei 225 down 5 percent, or 605.04 points, to 11,609.72 Tuesday after the bankruptcy of investment bank Lehman Brothers and the sudden deal to sell Merrill Lynch to Bank of America rattled markets in the U.S. and Europe.

Among the fashion decliners in Tokyo were Fast Retailing, which runs the Uniqlo chain and was down 5.9 percent to 10,740 yen, and Shiseido, which fell 1.5 percent to 2,565 yen. In the department store sector, Takashimaya Co. was down 4.3 percent to 832 yen while Isetan Mitsukoshi Holdings was off 4.2 percent to 1,096 yen.

Most Asian exchanges were on the sidelines Monday as they were closed for public holidays and not able to react to the weekend’s banking shakeup until Tuesday.

In London, the FTSE 100 continued its decline from Monday and was off 3 percent by 3:15 local time.

After an hour of trading in New York, the Dow Jones Industrial Average was down just 0.2 percent to 10,900.90, after falling 4.4 percent Monday.

For complete coverage, see Wednesday’s issue of WWD.