Nikkei slumps to over 3-year low as market panic deepens; REITs pounded

* Nikkei down 6% on day, 16% on week on panic selling
* REITs dive 10.5% as bond proxy buying wound back
* Japan shares now trade at 80% of book value

By Hideyuki Sano
TOKYO, March 13 (Reuters) - Japan's Nikkei share average
.N225 tumbled to more than three-year lows on Friday as
investors rushed out of stocks and real estate funds on fears
the global coronavirus pandemic will bring a global recession
and also scupper the Tokyo Olympics.
The Nikkei .N225 lost 6.08%, its biggest daily fall since
2013, to 17,431.05, a trough last seen in November 2016. On the
week, it sank 15.99%, its second worst week ever after a 24.33%
fall in early October 2008.
"It feels like panic. Investors are selling even assets that
should not be largely affected by the coronavirus, ignoring all
the fundamentals," said Takuya Hozumi, global investment
strategist at Mitsubishi UFJ Morgan Stanley Securities.
Selling mounted as investors have little idea now on how
much the global economy will slump as the coronavirus spreads,
forcing many governments to impose more restrictions on daily
life, analysts said.
The fear grew markedly after U.S. President Donald Trump on
Wednesday imposed restrictions on travel from Europe to the
United States while offering little in the way of measures to
support consumption. "With so many restrictions on people's moves, this will be a
man-made recession. If governments stop human moves to such an
extent, they need economic safety nets too," said Hiroshi
Watanabe, senior economist at Sony Financial Holdings.
Watanabe said the Nikkei's current levels suggested the
market has completely priced in a scenario that the Tokyo Games
planned this summer will not happen.
Analysts have estimated that a cancellation of the Games
would reduce corporate Japan's earnings by 24%.
The Nikkei has now fallen 28% from a 15-month peak hit in
January.
"The market has completely priced in cancellation of the
Olympics but we still don't see where the bottom is," Watanabe
said.
The Nikkei is now traded at about 80% of its book value,
which is close to a low touched during the 2008-09 financial
crisis, raising some hopes that the market may be near a bottom,
analysts said.
Still, huge uncertainties over the corporate outlook are
likely to keep many investors cautious after a market meltdown
since last month.
The broader Topix .TOPX fell 4.98% to 1,261.70. Turnover
reached 4.89 trillion yen, the highest level in more than two
years.
Real estate companies .IRLTY.T were hit severely, falling
10.0% to nine-year lows as the COVID-19 outbreak is expected to
encourage remote working, possibly reducing demand for offices
in the future.
Real Estate Investment Trusts, which had been bought heavily
as an alternative to negative-yielding bonds, suffered brutal
declines.
The TSE REIT index .TREIT dived 10.5%, the biggest one-day
drop since its 12.0% fall in October 2008.