Japanese shares end higher on cyclicals boost, tech weakness caps gains

  • Reuters
  • Stock Market News
Japanese shares end higher on cyclicals boost, tech weakness caps gains
Credit: © Reuters.

TOKYO, May 6 (Reuters) - Japanese shares gained on Thursday to mark their biggest percentage gain in two weeks, as investors scooped up cyclical shares following Wall Street gains, although the gains were capped by technology shares that tracked the Nasdaq lower.

The Nikkei share average .N225 advanced 1.8% to close at 29,331.37, while the broader Topix .TOPX gained 1.54% to 1,927.40. The market reopened on Thursday after three days of public holidays.

"The market rebounded after sell-offs before the Golden Week holiday when investors were too cautious about the market outlook," said Shoichi Arisawa, general manager of the investment research department at IwaiCosmo Securities.

"The strong U.S. market also supported sentiment today. But I am not sure how long this will last because the (coronavirus) situation in Japan is very different from that in the U.S."

The Dow Jones Industrial Average .DJI ended at a record high on Wednesday, driven by economically sensitive sectors, while the Nasdaq Composite .IXIC ended lower as Treasury Secretary Janet Yellen suggested an interest rate hike. .N

While the U.S. economy has shown signs of recovery from the COVID-19 lows, Japan's economy still remains under strain, with the nation considering extending a state of emergency in Tokyo and other major urban areas. Governor Yuriko Koike said on Thursday an extended state of emergency was needed to contain infections that are straining the capital's medical system. makers led gains, with steel makers JFE Holdings 5411.T and Nippon Steel 5401.T surging 8.00% and 7.50%, respectively, making them the top gainers on the Nikkei index. Paper maker Oji Holdings 3861.T jumped 6.97%.

Technology shares weighed on the indexes, with Advantest 6857.T falling 1.54%. Tokyo Electron inched up 0.89% even as its annual operating profit forecast of 442 billion yen ($4.04 billion) beat analysts' forecast. Motor 7201.T rose 2.92%, after the carmaker sold its roughly 1.5% stake in German carmaker Daimler DAIGn.DE .

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