Nikkei hits 6-week high after China-U.S truce lifts cyclical stocks

  • Reuters
  • Stock Market News
Nikkei hits 6-week high after China-U.S truce lifts cyclical stocks
Credit: © Reuters.

* Companies with high exposure to China soar

* Renesas jumps 10 pct; report quotes chief on self-driving ambition

By Ayai Tomisawa

TOKYO, Dec 3 (Reuters) - Japan's Nikkei surged to a six-week high on Monday after the United States and China suspended the imposition of new tariffs and agreed to try to reach a trade deal within 90 days. Nikkei share average .N225 soared 1.0 percent to 22,574.76, the highest closing level since Oct. 22.

Japanese cyclical stocks such as those in tech, autos and machinery that have large exposure to the Chinese market outperformed.

Hitachi Ltd 6501.T soared 4.1 percent and TDK Corp 6762.T surged 4.3 percent, while Toyota Motor Corp 7203.T advanced 3.4 percent.

Factory automation equipment maker Yaskawa Electric 6506.T rose 3.3 percent, babybottle maker Pigeon Corp 7956.T added 2.8 percent and cosmetics maker Shiseido Co 4911.T gained 3.4 percent.

The U.S.-China truce "is raising investors' risk appetite especially on stocks that have underperformed lately," said Yoshinori Shigemi, a global market strategist at JPMorgan (NYSE: JPM ) Asset Management.

"In the mid-term, there are concerns that new tariffs will start after 90 days, but the market also expects China to come up with a stimulus programme before then."

Apart from trade, Shigemi said that investors also took heart from comments by U.S. Federal Reserve Chair Jerome Powell, which pointed toward a slower pace of rate hikes. were concerned about trade and Fed's policy, so right now with the two major worries receding, the environment is favourable for stocks now," Shigemi said.

Renesas Electronics 6723.T , which has deepened a push into semiconductors for self-driving cars, jumped 10 percent.

The broader Topix .TOPX rose 1.3 percent to 1,689.05. (Editing by Richard Borsuk; Editing by Simon Cameron-Moore)

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