* Nikkei rises to highest level since late February
* Value shares such as banks, steelmakers and autos soar
* Turnover hits highest level in 2 months
* Nissan up on revival plan, Dentsu gain after earnings
By Hideyuki Sano
TOKYO, May 28 (Reuters) - Japan's Nikkei share average jumped on Thursday, vaulting above a key technical resistance of its 200-day moving average, on hopes of a quick economic normalisation, with investors snatching up deeply discounted stocks such as financials.
The positive mood overwhelmed concerns about deteriorating U.S-China relations as Washington signals it may no longer regard Hong Kong warranted special treatment as Beijing prepares new security law for the territory. Nikkei average .N225 gained 2.32% to 21,916.31, rising above a major chart point of the 200-day moving average at 21,657. The broader Topix .TOPX gained 1.80% to 1,577.34. Both indexes hit their highest levels since late February.
Gains were led by short-covering in value-oriented shares, such as financials, steelmakers and autos -- the sectors that had slumped since the global outbreak of the novel coronavirus.
"Rallies in U.S. and European markets and Japan's stimulus are helping the market. As investors see a bottom-out in the economy, it is natural for them to buy cyclical and value stocks," said Seiki Orimi, senior strategist at Mitsubishi UFJ Morgan Stanley (NYSE: MS ) Securities.
Japanese Prime Minister Shinzo Abe's cabinet approved on Wednesday a new $1.1 trillion stimulus package that includes significant direct spending. Motor 7201.T rallied 8.2% and Mitsubishi Motor 7211.T rose 6.4% after the two automakers, along with Renault RENA.PA , announced a revival plan, pledging to cut vehicle ranges and pool manufacturing by region. 4324.T soared 16.4% after the PR firm reported profits for the three months to March, compared to a net loss a year earlier. Holdings 6098.T gained 7% despite its January-March earnings falling short of expectations.
Trade was active with the turnover jumping to 3.38 trillion yen ($31.35 billion), the highest in two months. ($1 = 107.8300 yen)
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