Japan’s Nikkei Rallies Broadly Amid Wall Street Gains, China Spending
12:12 JST, October 25, 2023
TOKYO(Reuters) – Japan’s Nikkei share average rose strongly on Wednesday, continuing its rebound from a three-week low, as it tracked overnight gains on Wall Street amid solid earnings and robust U.S. economic data.
Reports that Beijing had approved 1 trillion yuan ($136.8 billion) in spending to support China’s economic growth also provided a tailwind.
The Nikkei .N225 gained 1.3% to 31,466.92 as of the midday break, closing at the session high, the strongest level since Thursday. It had dipped as low as 30,551.67 in the previous session, a level last seen on Oct. 4.
Of the Nikkei’s 225 components, 218 gained versus only seven decliners.
Expectations for market swings also receded, with a gauge of Nikkei volatility .JNIV dropping to a one-week low.
The broader Topix .TOPX rose 1.27%.
All of the Tokyo Stock Exchange’s 33 industry groups gained, led by a 2.46% advance for oil and coal producers .IPETE.T as crude paused its recent slide. O/R
Stocks are being bought very broadly, that’s the strong impression from the market, said Kazuo Kamitani, a strategist at Nomura Securities.
The market is looking to test the recent highs, that’s the situation we find ourselves in currently.
The Nikkei could rise to this month’s closing high of 32,494.66 by the start of November, although a push beyond that would require some degree of expectations for robust earnings results, Kamitani said.
The Japanese earnings season has been underway since around the start of the month, but picks up next week and peaks in mid-November.
Industrial machinery maker IHI Corp 7013.T was the Nikkei’s top performer, jumping 5.25%.
Chip-making equipment manufacturer Screen Holdings 7757.T was next, advancing 3.9%. Bigger peer Tokyo Electron 8035.T was the biggest points gainer, contributing 44.5 points with a 2.22% rise.
Another chip-making machinery maker, Kokusai Electric 6525.T made its trading debut, surging 26% over its IPO price.
Leading the handful of decliners, motor maker Nidec 6594.T lost 2.2%, extending its drop to a second day after its financial results disappointed investors.
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