Tokyo stocks extended its rebound substantially on Friday as semiconductor-related names continued to surge.
The 225-issue Nikkei average advanced 465.13 points, or 1.58%, to close at 29,854.00. On Thursday, the benchmark index gained 210.07 points.
The Topix index of all first section issues finished 13.98 points, or 0.71%, higher at 1,971.62, after rising 3.64 points the previous day.
The Tokyo market made a strong start after all three key U.S. market gauges climbed on Thursday, reacting favorably to U.S. President Joe Biden’s announcement of his infrastructure spending package.
Better-than-expected readings in the U.S. Institute of Supply Management manufacturing purchasing managers’ index for March also underscored market optimism.
A fall of U.S. long-term interest rates spurred buying for Wall Street tech stocks, which spilled over to chip-related issues in the Tokyo market.
Trading became lackluster in the afternoon, as foreign investors were on holiday for Good Friday and remaining players sat on the fence ahead of the release of U.S. jobs data for March after trading hours.
“Investors have taken notice of improved fundamentals for semiconductor names,” Chihiro Ota, general manager for investment research and investor services at SMBC Nikko Securities Inc., said. “With Biden’s infrastructure plan and positive news coming from chipmaking giants Micron Technology and TSMC, money is being channeled into the sector after a two-month correction.”
Maki Sawada, strategist at Nomura Securities Co., noted that the ISM’s data showed the U.S. manufacturing sector growing at the fastest pace in 37 years.
“Combined with Markit’s revised eurozone purchasing managers’ index for March, which also showed positive results, the economic indicators fueled expectations for a faster recovery,” Sawada said.
In the TSE first section, gainers outnumbered losers 1,313 to 783, while 94 issues were unchanged. Volume plunged to 1.002 billion shares from Thursday’s 1.245 billion shares.
Chipmaking gear-maker Tokyo Electron and chip-testing device manufacturer Advantest climbed 3.00% and 4.17%, respectively.
Industrial robot-maker Fanuc continued to attract buying on expectations for increased capital investment, after the Bank of Japan’s tankan quarterly business sentiment survey for March pointed to a boost in investment plans.
Other major winners included Nippon Electric Glass, which revised up its earnings forecasts.
On the other hand, department store operators J. Front Retailing and Isetan Mitsukoshi lost ground on rising concerns over a novel coronavirus resurgence after the government Thursday decided to implement pre-emergency countermeasures in some parts of the country.
Banking names declined due to prolonged worries about margin call defaults by a U.S. hedge fund.
Internet advertising firm Cyberagent and automaker Nissan also met with selling.
In index futures trading on the Osaka Exchange, the key June contract on the Nikkei average jumped 530 points to end at 29,930.
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