Japan Shares Bounces Back 1.2 percent from 6-week low, aided by relative calm in Ukraine
March 18, 2014 8:18 am
Nikkei bounced back on Tuesday, taking heart from advances on Wall Street on the back of relief that Crimea’s vote to join Russia passed without major violence and on fairly positive U.S. data.
The Japan stocks share average rallied 1.2 percent to 14,452.33, re emerging from a six-week closing low hit on Monday, though it is still down over five percent from a five-week high around 15,300 achieved on March 7.
Doubts about the economic effect of Tokyo’s planned sales tax hike in April, slowing development in China and the crisis in Ukraine have weighed on the market in the current weeks.
Overnight increases on Wall Street, aided by data displaying manufacturing output recorded its biggest hike in six months in February, helped produced an upbeat mood.
Traders stated that careful investors were now looking ahead to Russian President Vladimir Putin’s address to the parliament on Crimea later in the day.
“I think markets had already expected Crimea’s independence. We have to see what Putin will say but assuming he does not make bombshell announcements, the Nikkei is likely to
test this month’s high again,” said Soichiro Monji, chief strategist at Daiwa SB Investments.
Short-covering was likely driving much of the purchasing on Tuesday, especially as the ratio of short-merchandising in overall sales in the Tokyo Stock Exchange reached a record high of 36.17 percent the previous day.
Mitsubishi Electric bolstered 3.1 percent after the firm increased its yearly dividend payouts more than expected to 17 yen, the topmost performing mark since the firm started closing book on an yearly basis in 1976.
Glass and ceramics firms were the top mover in the TSE’s 33 sector sub indexes after their steep decline on Monday.
“Some of those who sold yesterday are probably buying back today,” said Hideyuki Ishiguro, senior strategist at Okasan Securities.
“The market is likely to regain stability but Japanese shares’ performance is exceptionally poor since concerns over Ukraine hit global markets,” suggesting domestic concerns were also having a bigger impact on the market, he added.
One big worry is that a planned sales tax increase in April could hurt consumption at a time when overall economic development has slowed in recent quarters.
Fading hopes of further near-term financial stimulus by the Bank of Japan have also dragged on divisions such as real estate and securities brokerages, which were big beneficiaries of the central bank’s aggressive easing last year.
Real estate firms climbed 0.5 percent, underperforming the total market and were still down over 21 percent so far this year.
The broader Topix index inched up 1.0 percent to 1,165.86 while the JPX-Nikkei Index 400, a gauge comprising companies with high return on equity and strong corporate governance, bolstered 1.0 percent.
The material has been provided by InstaForex Company – www.instaforex.com
Nikkei bounced back on Tuesday, taking heart from advances on Wall Street on the back of relief that Crimea’s vote to join Russia passed without major violence and on fairly positive U.S. data.
The Japan stocks share average rallied 1.2 percent to 14,452.33, re emerging from a six-week closing low hit on Monday, though it is still down over five percent from a five-week high around 15,300 achieved on March 7.
Doubts about the economic effect of Tokyo’s planned sales tax hike in April, slowing development in China and the crisis in Ukraine have weighed on the market in the current weeks.
Overnight increases on Wall Street, aided by data displaying manufacturing output recorded its biggest hike in six months in February, helped produced an upbeat mood.
Traders stated that careful investors were now looking ahead to Russian President Vladimir Putin’s address to the parliament on Crimea later in the day.
“I think markets had already expected Crimea’s independence. We have to see what Putin will say but assuming he does not make bombshell announcements, the Nikkei is likely to
test this month’s high again,” said Soichiro Monji, chief strategist at Daiwa SB Investments.
Short-covering was likely driving much of the purchasing on Tuesday, especially as the ratio of short-merchandising in overall sales in the Tokyo Stock Exchange reached a record high of 36.17 percent the previous day.
Mitsubishi Electric bolstered 3.1 percent after the firm increased its yearly dividend payouts more than expected to 17 yen, the topmost performing mark since the firm started closing book on an yearly basis in 1976.
Glass and ceramics firms were the top mover in the TSE’s 33 sector sub indexes after their steep decline on Monday.
“Some of those who sold yesterday are probably buying back today,” said Hideyuki Ishiguro, senior strategist at Okasan Securities.
“The market is likely to regain stability but Japanese shares’ performance is exceptionally poor since concerns over Ukraine hit global markets,” suggesting domestic concerns were also having a bigger impact on the market, he added.
One big worry is that a planned sales tax increase in April could hurt consumption at a time when overall economic development has slowed in recent quarters.
Fading hopes of further near-term financial stimulus by the Bank of Japan have also dragged on divisions such as real estate and securities brokerages, which were big beneficiaries of the central bank’s aggressive easing last year.
Real estate firms climbed 0.5 percent, underperforming the total market and were still down over 21 percent so far this year.
The broader Topix index inched up 1.0 percent to 1,165.86 while the JPX-Nikkei Index 400, a gauge comprising companies with high return on equity and strong corporate governance, bolstered 1.0 percent.
The material has been provided by InstaForex Company – www.instaforex.com
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