Business / Financial Markets | TSE DATA & REPORT

Tokyo stocks continue to surge on vaccine development progress, economic news

JIJI

Tokyo stocks continued their upsurge for the third market day Thursday, as reported progress in the development of a vaccine for the new coronavirus and positive economic news stimulated buying sentiment further.

The 225-issue Nikkei average shot up 554.03 points, or 2.38 percent, to end at 23,873.59. On Wednesday, it soared 234.97 points.

The Topix index of all TSE first section issues finished at 1,736.98, up 35.15 points, or 2.07 percent, after jumping 17.59 points the previous day.

Investors flocked to Tokyo stocks from the outset, taking a cue from Wall Street extending its winning streak Wednesday on media reports about progress in efforts to develop a vaccine and other treatments to those suffering pneumonia caused by the coronavirus.

Sentiment was brightened further by the Institute for Supply Management’s better-than-expected nonmanufacturing index for January and a strong U.S. nonfarm payroll increase in the same month shown by Automatic Data Processing Inc., brokers said.

Buying unabated in the afternoon, also backed by China’s announcement of a plan to cut tariffs on $75 billion of U.S. goods starting Feb. 14 in line with the so-called phase one trade agreement.

The tariff cut announcement “prompted short-covering in the futures market,” eventually sending the Nikkei close to the psychologically important threshold of 24,000, Hiroaki Kuramochi, chief market analyst at Capital Partners Securities Co., said.

“The coronavirus outbreak is undoubtedly a worry, but U.S.-China trade remains the biggest market concern,” Kuramochi added.

Another market sources pointed out that Toyota Motor Co.’s upward revision in its operating profit forecast for the year through March also fueled stock buying.

On the TSE’s first section, rising issues trounced falling ones 1,838 to 271 while 50 issues were unchanged. Volume increased to 1.654 billion shares from Tuesday’s 1.329 billion shares.

All of the 33 subsector price indexes rose.

China-linked issues such as industrial robot producer Fanuc Corp. and construction machinery-maker Komatsu attracted purchases thanks to receded virus concerns.

Automakers including Toyota Motor Corp. and Honda Motor Co. went up, and so did technology and entertainment giant Sony Corp. and other export-oriented names.

Oil stocks such as JXTG Holdings Inc. and Cosmo Energy Holdings Co. jumped due to higher crude oil prices.

Among other winners were clothing store chain Fast Retailing Co. and technology investor Softbank Group Corp.

Meanwhile, snack food-maker Calbee Inc. met with selling as its operating profit forecast for the year to March failed to beat a market consensus.

Also on the negative side were technology firm DeNA Co. and Mitsubishi Estate Co.

In index futures trading on the Osaka Exchange, the key March contract on the Nikkei average jumped 590 points to end at 23,950.