Business / Financial Markets | TSE DATA & REPORT

Tokyo stocks rebound on buybacks

JIJI

Stocks turned higher Tuesday, boosted by buybacks following the previous day’s plunge.

The Nikkei 225 average rose 248.76 points, or 1.14 percent, to end at 22,147.75. It tumbled 344.67 points Monday.

The Topix, which covers all first-section issues on the Tokyo Stock Exchange, closed 18.96 points, or 1.16 percent, higher at 1,659.35. It retreated 18.37 points Monday.

The market was supported by futures-led buying to adjust positions ahead of the U.S. midterm elections Tuesday, market sources said.

Market players expect that there will be no big surprise in the elections, Chihiro Ota, general manager for investment research and investor services at SMBC Nikko Securities Inc., said.

In the elections, the Democratic Party is widely expected to win a majority in the House of Representatives, while the Republicans are seen maintaining their Senate majority.

Tomoaki Fujii, head of the investment research division at Akatsuki Securities Inc., indicated that some investors bought shares in anticipation of a stock market rise after the elections, saying that the closely watched political event has been “an uncertain factor” for the market.

“Issues backed by brisk earnings were bought back” although a wait-and-see mood persisted prior to the U.S. elections, Masahiro Ichikawa, senior strategist at Sumitomo Mitsui Asset Management Co., said.

Akatsuki Securities’ Fujii said that “a sense of relief spread (among investors) thanks to Toyota Motor’s upward revision” to its fiscal 2018 group sales and profit estimates, released Tuesday.

Rising issues overwhelmed falling ones 1,362 to 674 on the first section, while 75 issues were unchanged.

Volume dropped to 1.342 billion shares from 1.489 billion Monday.

Toyota closed up 2.09 percent. The leading automaker raised its sales estimate for the year to next March to ¥29.5 trillion from ¥29 trillion and its operating profit forecast to ¥2.4 trillion from ¥2.3 trillion.

Price comparison website operator Kakaku.com attracted hefty purchases after announcing Tuesday that its group operating profit in the six months to September rose 11.3 percent from a year before to ¥11.683 billion.

Also on the plus side were supermarket and convenience store operator FamilyMart Uny and clothing store chain operator Fast Retailing.

By contrast, Suntory Beverage and Food fell 3.12 percent, with investors disappointed by the company’s announcement Monday of a downward revision to its 2018 group operating profit estimate to ¥118 billion from ¥127 billion.

Other major losers included mobile phone carrier SoftBank Group and semiconductor-related Tokyo Electron.