Tokyo stocks staged a powerful rally Thursday, attracting buybacks following their falls before the Golden Week holiday period in Japan.
The 225-issue Nikkei average surged 518.74 points, or 1.80%, to end at 29,331.37. On Friday, the key market gauge dropped 241.34 points.
The Topix index of all first section issues jumped 29.16 points, or 1.54%, to 1,927.40 after falling 10.82 points the previous trading day. The Tokyo market was closed from Monday through Wednesday for national holidays.
The market shot up right after the opening bell with investors rushing to buy back economically sensitive cyclicals following the U.S. Dow Jones Industrial Average’s record-breaking rise the previous day.
The initial spurt is also attributable to buying for technical reasons, brokers said.
Some technology-oriented stocks came under strong selling pressure stemming from the tech-heavy Nasdaq composite index’s four-session slide until Wednesday. But the overall market continued to climb in the morning, allowing the Nikkei to gain up to some 600 points.
In the afternoon, both the Nikkei and Topix indexes went sideways amid a dearth of fresh trading incentives.
Active buying was also held in check before the U.S. Labor Department’s release of its employment report for April on Friday and next week’s earnings announcements by such major companies as Toyota, brokers said.
“Sentiment was brightened by the steady progress in coronavirus vaccinations in Europe and the United States,” said Masahiro Ichikawa, chief market strategist at Sumitomo Mitsui DS Asset Management Co.
Also behind the day’s rise was that the dollar-yen pair regained stability, Maki Sawada, strategist at Nomura Securities Co., pointed out.
“Many investors hunted stocks backed by robust earnings,” Sawada added.
On the TSE first section, gainers overwhelmed decliners 1,625 to 492 while 74 issues were unchanged. Volume increased to 1.526 billion shares from Friday’s 1.350 billion shares.
Among popular cyclicals, steelmakers JFE and Nippon Steel surged 8.00% and 7.5%, respectively.
Machinery-maker Komatsu rose 4.15% thanks to its rosy operating profit forecast for the current business year ending next March.
Other major winners included clothing retailer Fast Retailing, tech investor SoftBank Group and automaker Toyota.
Meanwhile, housing and wood products supplier Sumitomo Forestry tumbled 6.32% amid growing uncertainty whether the current U.S. housing boom will last long.
The technology sell-off caused semiconductor-testing device manufacturer Advantest to drop 1.54% and chipmaking gear-maker Screen 1.53%.
In index futures trading on the Osaka Exchange, the key June contract on the Nikkei average gained 430 points to end at 29,310.
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