Business / Financial Markets | TSE DATA & REPORT

Nikkei bounces back on SoftBank Group's strength

JIJI

The Nikkei rebounded Wednesday despite persistent concerns over the COVID-19 outbreak thanks to the popularity of technology investor Softbank Group Corp.

The 225-issue Nikkei average of the Tokyo Stock Exchange rose 175.23 points, or 0.74 percent, to end at 23,861.21, after falling 142.00 points Monday. The Tokyo market was closed Tuesday for a national holiday.

Meanwhile, the Topix index of all TSE first section issues closed down 0.72 point, or 0.04 percent, at 1,718.92, following a 12.50-point drop the previous trading day.

The Nikkei average’s rise reflected a jump in the stock price of Softbank Group, a heavyweight component of the key indicator, in response to a U.S. federal district court approval of the planned merger of T-Mobile U.S. Inc. and Sprint Corp., brokers said. Sprint is a Softbank Group unit.

Active buying of semiconductor-linked stocks also supported the Nikkei average throughout the day as well, they added.

On the other hand, deep-rooted concerns over the spreading coronavirus outbreak sent the Topix index into negative territory in the early morning, where it remained for the rest of the day, the brokers said.

In the afternoon, both indexes fluctuated within a narrow range due to a dearth of fresh trading incentives.

“Softbank Group alone pushed the Nikkei up by around ¥150 (at one point),” said Yutaka Miura, senior technical analyst at Mizuho Securities Co.

The market as a whole was weighed down by concerns over COVID-19, especially because the health ministry announced Wednesday that a quarantine officer who worked on the Diamond Princess cruise ship, quarantined off Japan, tested positive for the virus, he said.

He added that investors refrained from active trading in the afternoon to wait to see U.S. market developments later Wednesday.

Maki Sawada, vice president of Nomura Securities Co.’s Investment Research & Investor Services Department, said the Tokyo market is expected to be “top-heavy” until the impact of the coronavirus outbreak on the economy becomes clear.

On the TSE’s first section, falling issues outnumbered rising ones 1,275 to 796 while 88 issues were unchanged. Volume increased to 1.395 billion shares from Monday’s 1.161 billion shares.

Softbank Group jumped 11.89 percent.

Semiconductor-related issues, including Tokyo Electron and Advantest Corp, attracted buying, after the tech-heavy U.S. Nasdaq index rewrote its all-time closing high and the SOX Philadelphia semiconductor index advanced Tuesday.

Sanyo Shokai rose 9.61 percent following a Bloomberg report Wednesday that a U.S. activist investor urged the apparel maker to sell itself.

Among other major winners were security firm Secom Co. and consumer lender Aiful Corp.

On the other hand, MonotaRO Co. dropped 4.18 percent as market players were disappointed with the tool shopping website operator’s January sales announced Monday.

In index futures trading on the Osaka Exchange, the key March contract on the Nikkei average rose 230 points to end at 23,870.