Tokyo stocks continued to add to gains Wednesday amid an unabated risk-on mood in markets around the globe.
The Nikkei average of 225 selected issues listed on the first section of the Tokyo Stock Exchange rose 131.27 points, or 0.50 percent, to close at a yet another 29-year high of 26,296.86, after surging 638.22 points Tuesday.
The TOPIX index of all TSE first-section issues finished up 5.27 points, or 0.30 percent, at 1,767.67 in its four-day winning streak. The broader index jumped 35.01 points the previous day.
The Tokyo market attracted hefty buying from the outset, after all three major U.S. stock indexes extended gains Tuesday with the Dow Jones industrial average closing above 30,000 for the first time ever.
The benchmark Nikkei average shot up more than 500 points in the early morning, also supported by rises in European stocks.
Investors’ risk appetite remained strong due to unabated expectations for novel coronavirus vaccines to become publicly available early and optimism over smooth power transition to U.S. President-elect Joe Biden, brokers said.
But stocks pared their gains in the afternoon, as sentiment was dampened by media reports about the Tokyo Metropolitan Government’s plan to request bars and restaurants to shorten their business hours amid the coronavirus resurgence.
Growing concerns over the market’s overheating prompted selling to lock in profits, brokers noted.
Masahiro Ichikawa, chief market strategist at Sumitomo Mitsui DS Asset Management Co., said, “The adverse effects of the metropolitan government’s move on the market would be short-lived amid the overall upward trend.”
Meanwhile, an investment adviser pointed out that purchases were concentrated on high-priced shares.
Other market sources said active buying receded in the afternoon with many players taking to the sidelines to wait for U.S. economic indicators and the minutes of the U.S. Federal Reserve’s Federal Open Market Committee meeting in November, to be released later in the day.
On the TSE’s first section, decliners outnumbered gainers 1,318 to 771 with 89 issues unchanged. Volume increased to 1.54 billion shares from Tuesday’s 1.39 billion shares.
Nissan rocketed 6.96 percent in response to the automaker’s announcement of a plan to release its fully remodeled Note electric subcompact car and news about the government’s plan to double subsidies to new electric vehicle buyers
Pharmaceutical firm Shionogi benefited from the U.S. Food and Drug Administration’s approval of its Xofluza flu drug.
Heavily weighted components of the Nikkei average, such as Fast Retailing and SoftBank Group, were upbeat as well.
On the other hand, railway operator JR Tokai slumped along with other coronavirus-sensitive stocks.
Baby goods retailer Nishimatsuya tumbled 9.41 percent.
In index futures trading on the Osaka Exchange, the key December contract on the Nikkei average rose 150 points to end at 26,380.
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