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Tokyo stocks gain slightly on buybacks

JIJI

Stocks gained further ground on the Tokyo Stock Exchange on Tuesday, underpinned by continued buybacks after the tumble last week, on the back of gains overseas, the weaker yen and firmer crude oil.

The Nikkei average climbed 31.85 points, or 0.20 percent, to end at 16,054.43. On Monday, it rocketed 1,069.97 points.

The Topix advanced 4.78 points, or 0.37 percent, to 1,297.01, after rising 95.95 points the previous day.

The Nikkei plunged around 200 points in the early morning, weighed down by selling on a rally in the wake of the previous day’s surge.

After the initial selling ran its course, however, the Nikkei rebounded into positive territory due to a wave of buybacks encouraged by higher European stocks and the yen’s fall, as well as by solid overseas crude oil prices in off-hours trading, brokers said.

Investor sentiment was brightened after European Central Bank President Mario Draghi hinted at additional easing in March in his testimony to the European Parliament, brokers said.

The Nikkei extended gains to over 300 points in early afternoon trading, backed by the yen’s further weakening against the dollar, but cut gains later in the absence of additional positive incentives.

Expectations grew for measures to deal with tumbling crude oil prices following news that major oil-producing countries such as Saudi Arabia and Russia will hold ministerial talks in Doha later on Tuesday, brokers said.

“The meeting will be carefully watched” as a plunge in crude oil prices is considered a major factor behind the recent market turmoil, said Chihiro Ota, general manager for investment research and investor services at SMBC Nikko Securities Inc.

“Investors also believe they need to carefully examine crude oil price movements and upcoming key economic indicators,” including Germany’s ZEW economic sentiment index for February, due out later on Tuesday, and Japan’s machinery orders data for December, to be released Wednesday, Ota added.

Rising issues outnumbered falling ones 965 to 873 in the TSE’s first section, while 99 issues were unchanged.

Volume decreased to 3,158 million shares from Monday’s 3,280 million shares.

Softbank Group soared 15.91 percent, a day after the mobile carrier said it will buy back up to 500 billion yen of its own shares, brokers said.

Banking groups Mitsubishi UFJ, Sumitomo Mitsui and Mizuho drew buybacks.

The easier yen boosted electronics maker Sony and automakers Nissan and Mazda.

On the other hand, beverage maker Kirin Holdings nose-dived 8.66 percent as its group operating profit forecast for the year to December 2016 fell short of the consensus market forecast, brokers said.

Domestic demand-oriented names came under profit-taking after their recent gains. They included Chugoku Electric, railway operator JR West and JAL.

In index futures trading on the Osaka Exchange, the key March contract on the Nikkei average advanced 100 points to close at 16,040.