Japan shares extend rally, end at 29-1/2-year high on U.S. stimulus, vaccine hopes

  • Reuters
  • Stock Market News
Japan shares extend rally, end at 29-1/2-year high on U.S. stimulus, vaccine hopes
Credit: © Reuters.

TOKYO, Dec 2 (Reuters) - Japan's Nikkei share average closed at a 29-1/2-year high on Wednesday, buoyed by hopes of a U.S. stimulus package and progress in a COVID-19 vaccine, but gains were capped by some profit-taking after a strong November rally.

Nikkei .N225 ended up 0.05% at 26,800.98, its highest closing since April 1991, extending its bull run after U.S. elections. The broader Topix .TOPX rose 0.32% to 1,773.97, edging near a two-year peak touched last Friday.

"With the Nikkei so close to 27,000, investors are getting a bit cautious. We've priced in a lot of good news. But I don't think the market will fall that much either," said Naoya Oshikubo, senior economist at Sumitomo Mitsui Trust Asset Management.

Sentiment was also fuelled as U.S. politicians put forth a flurry of proposals on coronavirus relief packages after a month-long partisan standoff. that vaccines can reduce the need for strict social restrictions next year also underpinned the market, especially value shares.

Honda Motor 7267.T rose 5.1% while retailer Seven&i Holdings 3382.T climbed 3.3% and Takeda Pharmaceutical 4502.T added 2.9%.

Topix value .TOPXV rose 1.01%, outperforming 0.32% gains in growth shares .TOPXG .

The Nikkei's gains were checked by a 4.8% drop in Recruit Holdings 6098.T , after the recruitment advertiser said its shareholders would sell 416.8 billion yen ($4 billion) worth of shares in the company to overseas investors. other large-cap growth shares were bruised by profit-taking, with both Sony 6758.T and Hoya 7741.T losing 2.0% each.

Ito en 2593.T lost 3.8% after the beverage firm cut its annual net profit outlook by more than a half.

Nishimatsuya Chain 7545.T dropped 2.7% after the retailer of kids clothes' earnings upgrade prompted profit-taking from the shares' 60% gains so far this year.

Workman 7564.T fell 5.0% after the clothing retailer's November sales grew 8.6% but came in short of market expectations.

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