UPDATE 1-Nikkei hits 30-year high as financials gain on Democrat control of Senate

  • Reuters
  • Stock Market News
UPDATE 1-Nikkei hits 30-year high as financials gain on Democrat control of Senate
Credit: © Reuters.

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TOKYO, Jan 7 (Reuters) - Japanese shares ended higher on Thursday, with the Nikkei touching a 30-year peak, powered by financials as U.S. bond yields climbed on expectations of larger stimulus following a Democrat sweep in two Senate runoffs in Georgia.

The Nikkei average .N225 closed 1.60% higher at 27,490.13, hitting its highest level since August 1990 at one point during the session and snapping a four-day losing streak.

The broader Topix .TOPX added 1.68% to 1,826.30, climbing above a peak hit late last year to reach its highest level since October 2018.

Investor appetite was not dented by the chaos in Washington D.C. after supporters of President Donald Trump stormed Capitol Hill, forcing Congress to suspend a session to certify President-elect Joe Biden's victory. seemed like the ultimate epitome of four years of Trump's presidency. But no one thinks the election results will be overthrown by this," said Takashi Hiroki, chief strategist at Monex.

Shares of Japanese banks and insurers, big investors in U.S. debt, are highly correlated with U.S. bond yields and were boosted by moves in the Treasury market.

Insurer Dai-ichi Life Holdings 8750.T rose 7.4%. Among banks, SMFG 8316.T gained 5.5%, while Mizuho 8411.T added 3.3% and Mitsubishi UFJ 8306.T rose 3.5%.

Other cyclical, value shares also gained on hopes of a stimulus package from the incoming Biden U.S. administration.

Steelmakers .ISTEL.T gained 5.2%, with Nippon Steel 5401.T rising 7.8%. Ship builder Hitachi Zosen 6501.T surged 13.7%.

The Democrat victory in the Senate fanned renewed appetite in renewable energy stocks, with Renova 9519.T jumping 10.6% to a record high.

Domestic leisure-related shares, such as railway companies .IRAL.T , bounced back even as the government looked set to impose a one-month state of emergency in Tokyo and three neighbouring prefectures to curb a spike in COVID-19 cases. economic impact would be much smaller than previous declarations as it is confined to Tokyo and restrictions will be limited," said Hiroyuki Ueno, chief strategist at Sumitomo Mitsui Trust Asset Management.

SoftBank Group 9984.T dropped 1.6% on news that the Trump administration is considering adding Alibaba (NYSE: BABA ) Group Holding Ltd 9988.HK to its trade blacklist of Chinese companies. Group is the largest shareholder of the Chinese e-commerce giant.

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