Business / Financial Markets

Nikkei adds 212 points to hit 20,390 on rising hopes for business recovery

Jiji

Tokyo stocks continued to attract purchases Monday amid growing expectations that business activity choked off by the coronavirus will eventually regain vigor in and outside Japan.

The Nikkei average of 225 selected issues on the first section of the Tokyo Stock Exchange climbed 211.57 points, or 1.05 percent, to end at 20,390.66, following a 504.32-point surge on Friday.

The Topix index of all first-section issues finished 22.34 points, or 1.53 percent, higher at 1,480.62, after soaring 31.55 points the previous trading day.

Stocks spurted from the outset on broad-based buying triggered by the yen’s drop against the dollar and an extended Wall Street rally Friday on economic recovery hopes fueled by a smaller-than-expected decline in U.S. nonfarm payrolls in April, brokers said.

The Tokyo market gained further ground in the morning thanks to firmer U.S. stock index futures in off-hours trading, lifting the Nikkei average by more than 350 points. But the market lost steam in the afternoon as investors stepped up selling to lock in profits, brokers said.

Tomoaki Fujii, head of the investment research division at Akatsuki Securities Inc., said investors are increasingly “looking toward the post-coronavirus pandemic future,” with over 30 U.S. states reopening and the Japanese government considering lifting the state of emergency in many of the 47 prefectures.

“The Nikkei would consolidate at levels above 20,000 if the market resists falling much despite dismal earnings reports,” which are likely to be released by several major firms this week, including Toyota and Sony, he noted.

On the first section, rising issues outnumbered falling ones 1,728 to 398 while 45 issues were unchanged. Volume declined to 1.313 million shares from Friday’s 1.372 million shares.

Oil names such as Cosmo Energy and Idemitsu benefitted from a recovery in crude oil.

Mega-bank group Mitsubishi UFJ, insurer Dai-ichi Life and other financials went up on a rise in U.S. long-term interest rates.

Among other winners were clothing chain operator Fast Retailing and job information firm Recruit Holdings.

Meanwhile, drugmaker Shionogi and technology firm Sharp met with selling after announcing disappointing earnings figures.

Also on the negative side were mobile phone carrier KDDI and seasoning producer Ajinomoto.

In index futures trading on the Osaka Exchange, the key June contract on the Nikkei average rose 350 points to end at 20,490.

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