Tokyo stocks bounced back Monday on brighter investor sentiment thanks to rosy Chinese economic data, sending the benchmark Nikkei 225 average to a 14-month closing high.
The Nikkei advanced 235.59 points, or 1.01 percent, to end at 23,529.50, the highest finish since Oct. 5, 2018. The index slid 115.23 points Friday.
The Topix, which covers all first-section issues on the Tokyo Stock Exchange finished 15.13 points, or 0.89 percent, higher at 1,714.49 following an 8.70-point drop Friday.
The market climbed immediately after the opening bell as market players were heartened by the Chinese manufacturing purchasing managers’ index for November, announced Saturday, which exceeded the boom-or-bust dividing line of 50 for the first time in seven months, signaling an upturn in the Chinese economy, brokers said.
A rise in Nikkei futures prices and a slight weakening of the yen against the dollar also supported the market’s underside, they said.
Aided by a rise in Chinese stocks, both the Nikkei and Topix remained in positive territory for the rest of the day.
“A sense of relief spread among investors as (the PMI) indicated signs of a recovery in the Chinese economy,” Masahiro Ichikawa, senior strategist at Sumitomo Mitsui DS Asset Management Co., said.
Meanwhile, Ichikawa said trading grew somewhat sluggish in the afternoon as “market players retreated to the sidelines to wait for” the Institute for Supply Management’s U.S. manufacturing index for November, due out later Monday.
Noting that key economic indicators will be announced in the United States and China later this week, Tomoaki Fujii, head of the investment research division at Akatsuki Securities Inc., said, “Market players will keep focusing on the economic indicators, as well as follow developments in the U.S.-China trade negotiations.”
Of the forthcoming indicators, the ISM’s nonmanufacturing index and China’s Caixin nonmanufacturing industry purchasing managers’ index, both for November, will be released Wednesday.
On the first section, rising issues outnumbered falling ones 1,515 to 542, while 100 issues were unchanged. Volume dropped to 946 million shares from Friday’s 994 million.
Export-oriented firms, including technology giant Sony and industrial robot producer Yaskawa Electric, attracted buying on the back of the better than expected Chinese PMI.
Specialized trader Uchida Yoko went limit-up to score a 15.55 percent gain, after the company announced strong earnings for July-October.
Among other winners were publisher Kadokawa and clothing store chain Fast Retailing.
On the other hand, Idemitsu and some other oil names attracted selling after Friday’s drop in New York crude oil futures.
Electric and fiber optic cable producer Fujikura and drugmaker Eisai also went down.