• Jiji

  • SHARE

The benchmark 225-issue Nikkei average closed above 26,000 for the first time in some 29 years in Tokyo trading Tuesday, driven by hopes for coronavirus vaccine development and a pickup in economic activity.

The Nikkei average selected issues listed on the Tokyo Stock Exchange’s first section rose 107.69 points, or 0.42%, from Monday to 26,014.62, its highest finish since May 14, 1991, after the collapse of Japan’s “bubble economy” in the early 1990s. On Monday, the Nikkei gained 521.06 points.

The Topix index of all TSE first-section issues gained 2.85 points, or 0.16%, to finish at 1,734.66, after climbing 28.59 points the previous day.

The advance came after the Dow Jones industrial average notched a record closing high Monday on news that U.S. biopharmaceutical company Moderna Inc. has confirmed that its coronavirus vaccine is 94.5% effective.

“The news raised expectations that vaccines will be put into practical use, helping economic activity in Japan and abroad normalize at an earlier-than-expected date,” an official at an online securities firm said.

The Nikkei fell into negative territory briefly under pressure to sell stocks to lock in profits.

Chihiro Ota, general manager for investment research and investor services at SMBC Nikko Securities Inc., said that the Nikkei’s rise was fueled by buying demand for cyclicals from foreign investors.

But Ota said that individual investors were selling growth stocks at the same time, leading to mixed currents of buying and selling.

Maki Sawada, vice president of Nomura Securities Co.’s Investment Research & Investor Services Department, said that stocks were “in a tug-of-war between a sense of overheating from their rapid rise and hopes for the normalization of the world economy” after coronavirus vaccines currently in development go into use.

The fact that most major firms’ earnings announcements for the April-September period have been completed was also a factor capping the market’s rise, she added.

On the TSE’s first section, decliners outnumbered gainers 1,347 to 753, with 76 issues unchanged. Volume fell to 1.373 billion shares from Monday’s 1.407 billion shares.

Hopes over coronavirus vaccine development drove ANA Holdings, the parent of All Nippon Airways, up 4.16% and rival Japan Airlines up 3.72%, as the industry has been struggling with sluggish passenger traffic amid the pandemic.

Mitsubishi Heavy attracted buying after Daiwa Securities Co. raised its rating and target price for the company for its suspension of delayed passenger jet development.

Other winners included insurers Tokio Marine and T&D.

On the other hand, Recruit Holdings dropped 2.17% a day after posting worse-than-expected earnings forecasts for the fiscal year ending next March.

Pharmaceuticals Chugai and Eisai also met with selling.

In index futures trading on the Osaka Exchange, the key December contract on the Nikkei average climbed 50 points to end at 26,040.

In a time of both misinformation and too much information, quality journalism is more crucial than ever.
By subscribing, you can help us get the story right.

SUBSCRIBE NOW

PHOTO GALLERY (CLICK TO ENLARGE)