Business / Financial Markets | TSE DATA & REPORT

Nikkei inches up on robust Chinese stocks and Dow futures

JIJI

The benchmark Nikkei average extended gains on the Tokyo Stock Exchange on Wednesday, aided chiefly by robust Chinese stocks and a climb in Dow Jones industrial average futures in off-hours trading.

The 225-issue Nikkei average advanced 23.98 points, or 0.12 percent, to end at 20,649.14. On Tuesday, the key market gauge rose 4.97 points.

On the other hand, the Topix index of all first-section issues closed down 3.98 points, or 0.26 percent, at 1,506.81, after gaining 5.58 points the previous day.

The Tokyo market got off to a sluggish start, battered by an overnight drop in U.S. stocks due to uncertainties over U.S.-China trade talks and the American economy, brokers said.

Such uncertainties were fueled after a news report that Washington and Beijing are struggling to set the date for a planned meeting in September and after the announcement of a lower-than-expected manufacturing index for August by the U.S. Institute for Supply Management, they said.

The Nikkei then managed to rebound into the sunny side, supported by rises in Shanghai and Hong Kong stocks, as well as a rise by Fast Retailing, a heavily weighted component of the key index.

The Nikkei mostly remained in positive territory in the afternoon, also helped by the strength of Dow futures.

The Topix, however, remained in negative territory almost throughout the day, although it resisted falling any further after its initial slump.

Yutaka Miura, senior technical analyst at Mizuho Securities Co., noted that the underside of the Nikkei was also supported by “expectations that the U.S. market will bounce back later on Wednesday, as suggested by Dow futures.”

Meanwhile, Masahiro Ichikawa, senior strategist at Sumitomo Mitsui DS Asset Management Co., said that the Nikkei was top-heavy “as there were no new incentives that would encourage investors to actively buy stocks.”

Hirohumi Yamamoto, strategist at Toyo Securities Co., suggested that political uncertainties in Britain associated with the country’s exit from the European Union weighed down the Tokyo market as well, amid a lack of strong trading incentives.

Falling issues outnumbered rising ones 1,587 to 482 in the TSE’s first section, while 81 issues were unchanged.

Volume increased to 900 million shares from Tuesday’s 841 million shares.

Clothing store chain Fast Retailing rose 0.87 percent, reflecting a 9.9 percent increase in its same-store sales for August.

Pharmaceutical company Kyowa Kirin surged 3.63 percent, advancing for the first time in three sessions, after Mitsubishi UFJ Morgan Stanley Securities Co. raised its target stock price for the company.

Other major winners included game-maker Nintendo and chipmaking equipment-maker Tokyo Electron.

By contrast, Mitsubishi UFJ, Nomura Holdings and other financial issues came under selling, due to a drop in U.S. long-term interest rates.

Among other major losers were cosmetics maker Shiseido and automaker Subaru.

In index futures trading on the Osaka Exchange, the key September contract on the Nikkei average rose 40 points to end at 20,700.

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