Views Article – Sharenet Wealth

Asia, News

Nikkei hits near 1-month high as China rebound hopes boost shippers, steelmakers

By Hideyuki Sano

TOKYO, July 6 (Reuters) – Japanese shares rose on Monday as signs of an economic rebound in China boosted shippers and steelmakers, while worries over a spike in COVID-19 cases in some U.S. states were offset by prospects of more policy support to sustain the recovery.

Japan’s Nikkei share average rose 1.83% to 22,714.44, its highest close since June 10. The broader Topix gained 1.60% to 1,577.15.

Cyclical stocks led the gains as Chinese shares jumped more than 5% to a five-year high on hopes of a recovery in the world’s second-largest economy.

Shares of securities brokerages jumped 3.3%, while shippers and steelmakers, both strongly leveraged to demand in China, gained 3.3% and 2.7% respectively.

Nissan Motor gained 5.2% after the carmaker said its sales in China, the world’s biggest auto market, rose last month.

Including those, value-oriented shares outperformed by rising 1.9%, compared to a 1.3% gain in growth shares .

Retailers also climbed, with department store operator J.Front Retailing advancing 7.3% and Seven & i Holdings adding 2.9%.

SoftBank Group rose 2.4% to a 14-month high, helped by hopes of share buybacks and unwinding of positions by short-sellers.

Still, trade volume was lacklustre overall, pointing to a lack of strong conviction among investors on the strength of the economy hobbled by the COVID-19 pandemic.

The turnover on the Tokyo Stock Exchange’s main board was only 1.801 trillion yen, not far from the lowest level for this year and about 20% below the average.

A spike in virus cases in some U.S. states is seen as a threat to the global economic recovery, even though investors are sticking to hopes that a gradual recovery could continue with steady policy support.

“The market is looking to see if selective lockdowns implemented by some states will curtail infections within a week or two,” said Nobuhiko Kuramochi, market economist at Mizuho Securities. (Reporting by Hideyuki Sano; Editing by Sherry Jacob-Phillips and Subhranshu Sahu)

© 2019 Thomson Reuters. All rights reserved. Reuters content is the intellectual property of Thomson Reuters or its third party content providers. Any copying, republication or redistribution of Reuters content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters. Thomson Reuters shall not be liable for any errors or delays in content, or for any actions taken in reliance thereon. "Reuters" and the Reuters Logo are trademarks of Thomson Reuters and its affiliated companies.