Business / Financial Markets | TSE DATA & REPORT

Tokyo stocks rally 420 points on buybacks and strength in U.S. equities

JIJI

Stocks staged a strong rebound Friday thanks to support from broad-based buybacks and the solid performance of U.S. equities.

The 225-issue Nikkei average surged 420.75 points, or 2.00 percent to end at 21,466.99 on the Tokyo Stock Exchange, snapping a three-day losing streak. The key market gauge tumbled 422.94 points Thursday.

The Topix index of all first-section issues finished up 29.69 points, or 1.94 percent, at 1,563.96, after giving up 33.14 points the previous day.

The market got off to a strong start in the wake of the Dow Jones industrial average’s upturn on the New York Stock Exchange on Thursday.

Both the Nikkei and Topix expanded their gains throughout the morning session, as investors kept buying back or hunting shares that had dropped to reasonable levels in the recent slump, brokers said.

A rise in Dow futures in off-hours trading and bullishness in Shanghai stocks also contributed to the Tokyo market’s rally, they added.

In the afternoon, however, the market turned lethargic amid a lack of fresh trading incentives.

Yutaka Miura, senior technical analyst at Mizuho Securities Co., pointed out that the higher Dow futures suggested the possibility of Wall Street extending its winning streak on Friday.

“Remembering the Nikkei’s rise following the 2016 House of Councilors election, investors moved to repurchase shares ahead of Sunday’s Upper House poll,” Miura said.

Tomoaki Fujii, head of the investment research division at Akatsuki Securities Inc., said, “Players refrained from buying further in the afternoon before the weekend and the looming election.”

Rising issues far outnumbered falling ones 2,007 to 102 on the TSE’s first section, while 41 issues were unchanged.

Volume fell to 1.109 billion shares from Thursday’s 1.288 billion shares.

Semiconductor-related issues, such as Screen and Advantest, went up after major foundry Taiwan Semiconductor Manufacturing Co. announced a rosy outlook for chip demand.

Asahi Holdings jumped 1.45 percent, partly due to a media report that the brewery is considering acquiring Australia’s Carlton & United Breweries.

Among other major winners were Sumitomo Dainippon Pharma and automaker Toyota.

A handful of losers included mobile game app developer DeNA and clothing store chain Fast Retailing.

In index futures trading on the Osaka Exchange, the key September contract on the Nikkei average shot up 370 points to end at 21,380.