The Tokyo stock market extended its rally Tuesday, led by vigorous buying of technology shares in the wake of the U.S. tech sector’s record-breaking advance.
The 225-issue Nikkei average of the Tokyo Stock Exchange jumped 279.50 points, or 0.96%, to close at 29,441.30, after gaining 213.07 points Monday.
The Topix index of all first section issues climbed 15.73 points, or 0.80%, to 1,975.48, accelerating its upswing from a rise of 5.73 points the previous day.
Stocks shot up right after the opening bell. Tech names attracted particularly strong buying after the Nasdaq composite index rewrote its all-time closing high in the U.S. market Monday, where the S&P 500 index also hit yet another new high while the Dow Jones Industrial Average turned moderately lower.
Toward noon, the Tokyo market stalled as economically sensitive cyclicals, such as steel-makers, came under profit-taking pressure. But investors renewed buying in the afternoon in view of Dow futures’ rise in off-hours trading, brokers said.
“While many investors were sitting on the fences ahead the U.S. Federal Reserve’s two-day Federal Open Market Committee meeting through Wednesday, short-term players became active buyers after seeing the Nikkei close above the 75-day moving average on Monday,” said Masahiro Ichikawa, chief market strategist at Sumitomo Mitsui DS Asset Management Co.
An official at a midsize securities firm said that recent rallies in European markets have turned investors’ attention to Japanese stocks as laggards.
“But the Tokyo market’s topside was capped by coronavirus concerns rekindled by Britain’s move to put off lifting lockdown measures,” said Kazuo Kamitani, strategist at Nomura Securities Co.
A broker pointed out that tech stocks attracted buying also because the U.S. benchmark 10-year interest rate remained below 1.5% to make them relatively cheap investment vehicles.
On the TSE first section, gainers outnumbered decliners 1,218 to 841 while 135 issues were unchanged. Volume grew to 972 million shares from Monday’s 854 million shares.
Top gainers among tech shares included chipmaking gear-maker Tokyo Electron and electronic parts supplier Taiyo Yuden.
Pharmaceutical firm Eisai soared 6.59% after its chief executive said sales of the U.S.-approved novel Alzheimer’s drug would amount to billions of dollars.
Toyota closed above ¥10,000 for the first time ever.
Z Holdings, the parent of internet service provider Yahoo Japan, and advertising giant Dentsu also rose markedly.
On the other hand, airline JAL tumbled 3.15% and its peer ANA Holdings 2.14%.
Steelmakers JFE and Nippon Steel shed 1.41% and 1.32%, respectively.
In index futures trading on the Osaka Exchange, the key September contract on the Nikkei average rose 270 points to end at 29,410.
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