Stocks staged a powerful rebound in Tokyo on Monday, buoyed by buybacks of oversold large-capitalization issues, with the Nikkei average briefly surging over 1,200 points but ending above 16,000.
The Nikkei rocketed 1,069.97 points, or 7.16 percent, to end at 16,022.58. It was the biggest single-day point gain since Sept. 9, 2015. On Friday, it tumbled 760.78 points.
The Topix shot up 95.95 points, or 8.02 percent, to close at 1,292.23, after falling 68.68 points the previous trading day.
Both indexes snapped a three-session losing streak. The Nikkei nose-dived over 2,000 points in the three sessions through Friday.
Aggressive buybacks were inspired by higher U.S. and European equities late last week, reflecting a rally in crude oil prices.
In the afternoon, stocks accelerated their upswing, with the Nikkei jumping some 1,200 points at one point. The upswing stemmed from further rises in the Nikkei’s heavily weighted components, such as clothing retailer Fast Retailing and mobile carrier Softbank, and increased buybacks of beaten-down financial issues and export-oriented names, brokers said.
Investors were also relieved to see that the Shanghai stock market, which reopened on Monday after the Lunar New Year holiday, cut early losses despite worries about larger losses, brokers said.
“The day’s rally was a technical rebound and it is too early to say that the Tokyo market has hit a bottom. But the Nikkei is likely to bounce back to 16,500 or 17,000 unless the external environment deteriorates,” said Hiroaki Hiwada, strategist at Toyo Securities Co.
Investors reacted little to Japan’s gross domestic product data for October-December as the results had already been factored in, brokers said.
On an annualized basis, the country’s GDP dropped 1.4 percent in the fiscal third quarter, according to government data released before the opening bell, against the median forecast of a 1.1 percent drop among 22 economic research institutes polled by Jiji Press.
Rising issues outnumbered falling ones 1,874 to 55 in the TSE’s first section, while eight issues were unchanged.
Volume decreased to 3,280 million shares from Friday’s 4,704 million shares.
All 33 sector subindexes on the first section ended higher.
Automaker Toyota, camera maker Canon and electronics maker Panasonic were upbeat as excessive wariness over their earnings receded in the wake of the yen’s weakening.
Financial issues were bought back actively after their massive losses in recent sessions. Among them were banking groups Mitsubishi UFJ and Sumitomo Mitsui, brokerage firm Nomura and insurers Tokio Marine and Dai-ichi Life.
By contrast, online shopping site operator Rakuten fell as its group operating profit for the year ended in December was worse than expectations, brokers said.
Supermarket operator Aeon plunged 3.26 percent after it on Friday revised down its group operating profit forecast for the year ending this month.
Other losers included Nippon Paper, Suntory Beverage & Food and TV Asahi Holdings.
In index futures trading on the Osaka Exchange, the March contract on the Nikkei average shot up 1,140 points to end at 15,940.