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Asia, News

Nikkei rises to 2-week high after Wall St’s historic surge

SYDNEY, March 25 (Reuters) – Japan’s benchmark Nikkei jumped more than 5% on Wednesday to a two-week high, tracking Wall Street’s big rebound on hopes U.S. lawmakers will soon approve a massive stimulus package to fight the economic fallout from the coronavirus pandemic.

The Nikkei average climbed 5.7% to 19,129.21 by the midday break, its highest level since March 12.

The benchmark is still down about 20% from its January 17 peak, underscoring the unprecedented health crisis that has severely disrupted the world economy and the daily life of millions with many nations forced into lockdowns.

The Nikkei’s volatility index, a measure of investors’ volatility expectations based on option pricing and considered to be a fear gauge, rose 5.3% to 47.92, but was some way away from a nine-year peak of 60.86 hit last week.

On Wall Street, the Dow Jones Industrial Average soared 11.37% on Tuesday, its biggest one-day percentage gain since 1933, after U.S. lawmakers said they were close to a deal for an economic rescue package, injecting optimism into the market.

The Tokyo market also cheered Tuesday’s official decision and announcement on the postponement of the 2020 Tokyo Olympics from the International Olympic Committee and the Japanese government, analysts said.

“Now that investors have one less uncertainty or risk factor to deal with, I would say the announcement has had a moderately positive impact on the stock market,” said Masahiro Fukuda, an investment director at Fidelity International (FIL) Japan.

Dentsu Group Inc, Japan’s main marketing agency for the Tokyo Games, surged 12.4% and sportswear maker Asics Corp jumped 17.5%.

After a call between the IOC President Thomas Bach and Japanese Prime Minister Shinzo Abe, both said the July 24-Aug. 9 Games would move to the summer of 2021 at the latest.

The broader Topix gained 5.2% to 1,402.78, with all of the 33 sector sub-indexes on the Tokyo Stock Exchange in positive territory.

Real estate was the top performing sector, up 9.3%, and the TSE REIT index climbed 10.7%, pulling away from a seven-year trough hit last Thursday. (Reporting by Tomo Uetake; Editing by Shri Navaratnam)

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