Buybacks help Tokyo stocks retake 16,000 line

Stocks erased earlier losses Monday to retake the 16,000 line with support from buying on dips, .

The Nikkei average gained 143.88 points, or 0.90 percent, to close at 16,111.05 on the Tokyo Stock Exchange after tumbling 229.63 points Friday.

The Topix index added 8.18 points, or 0.63 percent, to close at 1,300.00, after losing 19.38 points the previous trading day.

Tokyo stocks got off to a weaker start, weighed down by the yen’s strengthening against the dollar. By the middle of the morning session, however, the market wiped out the losses thanks to buying on dips and buybacks of undervalued stocks.

Although the topside was limited in the absence of fresh buying incentives, stocks stayed firm the rest of the day.

The solid movements relieved investors who were concerned about more heavy selling by funds of oil-producing counties following a drop in crude oil futures prices late last week, brokers said.

“Trading was thin in the apparent absence of selling from funds of oil-producing countries” after a deal reached last week by Saudi Arabia, Russia and other countries to keep oil output intact, said Chihiro Ota, general manager for investment research and investor services at SMBC Nikko Securities Inc.

A think tank official said investor sentiment is “gradually improving” from the global sell-offs that began roiling the market at the turn of the year.

“But the market failed to attract full-fledged buybacks,” Ota said.

The market is unlikely to resume an upward trend without fresh incentives, brokers said.

Attention is now focused on whether the Group of 20 finance ministers and central bank chiefs will agree to make a collective effort to stabilize financial markets and support global growth at a meeting in Shanghai for two days from Friday.

Rising issues outnumbered falling ones 1,256 to 588 on the TSE’s first section, while 96 issues were unchanged.

Volume fell to 2.037 billion shares from Friday’s 2.291 billion shares.

Airlines JAL and ANA Holdings gained ground, supported by lower crude oil prices.

Industrial robot maker Fanuc, clothing store chain operator Fast Retailing and mobile phone carriers KDDI and SoftBank, all heavily weighted components of the Nikkei average, were also buoyant.

Toymaker Tomy surged 6.84 percent amid growing hopes for a new product launch.

By contrast, Japan Post Bank tumbled 4.80 percent on the back of growing worries about difficulties in its asset management due to falling interest rates.

Steel maker Nippon Steel & Sumitomo Metal, JFE Holdings and oil company Inpex were also downbeat.

In index futures trading on the Osaka Exchange, the key March contract on the Nikkei average closed up 90 points at 16,070.

Add a Comment

Your email address will not be published. Required fields are marked *