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Tokyo stocks rebound sharply on buybacks

JIJI

Stocks staged a strong rally Tuesday, buoyed by buybacks following the previous day’s tumble stemming from Turkey’s financial crisis.

The Nikkei 225 average surged 498.65 points, or 2.28 percent, to end at 22,356.08. It plunged 440.65 points Monday.

The Topix, which covers all first-section issues on the Tokyo Stock Exchange, finished 27.45 points, or 1.63 percent, higher at 1,710.95 after shedding 36.66 points Monday.

Both indexes rose for the first time in five sessions.

The TSE enjoyed handsome gains as concerns over a global economic downturn on the back of Turkey’s turmoil have receded somewhat, brokers said.

Stocks accelerated their upswing in the afternoon, getting a boost from buybacks apparently by European players, they said.

Buying took the upper hand “after stock prices have fallen to affordable levels,” an official of a bank-affiliated securities firm said. The Nikkei had lost over 800 points in the four sessions through Monday.

Akira Tanoue, senior investment strategist at Nomura Securities Co., said Tuesday’s jump represented “a technical rally attributable to futures-led purchases amid thin trading.”

He also said investor sentiment was lifted by the yen’s weakening against the dollar and the absence of panic selling in the U.S. market the previous day. The U.S. Dow Jones industrial average and Nasdaq composite index fell Monday under the weight of the crisis in Turkey, but their losses were relatively small.

Still, an asset management firm official indicated that concerns over Turkey’s financial crisis have yet to be fully dispelled, noting that a risk-averse mood could reemerge if the Turkish lira takes a drubbing again.

Rising issues overwhelmed falling ones 1,795 to 264 on the first section, while 45 issues were unchanged.

Volume declined to 1.206 billion shares from 1.523 billion Monday.

Softbank Group closed up 3.72 percent after SMBC Nikko Securities on Monday raised its target stock price for the mobile phone carrier.

Precision equipment maker V Technology was upbeat after announcing a stronger than expected operating profit for April-June on Monday.

Other major gainers included clothing retailer Fast Retailing and air conditioner maker Daikin.

By contrast, drugmaker Takeda and Tokai Carbon met with selling.