Tokyo stocks close higher on bargain hunting

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IANS | 23 Feb, 2021
Tokyo stocks closed higher on Monday, bringing an end to a three-day losing streak, as investors picked up bargains following the market's recent decline, with the risk appetite towards high-tech issues improving on hopes for US stimulus to further help reboot the pandemic-hit economy.

The 225-issue Nikkei Stock Average added 138.11 points, or 0.46 per cent, from Friday to close the day at 30,156.03.

The broader Topix index of all First Section issues on the Tokyo Stock Exchange, meanwhile, rose 9.40 points, or 0.49 per cent, to finish at 1,938.35.

Local brokers said that from the get-go bargain hunting was the predominant theme for investors who picked up issues that had retreated following the Nikkei's run of closing lows.

They added that buying slowed in later trade as some traders looked to lock in gains ahead of a national holiday in Japan on Tuesday.

"Trading was dominated by hedge funds, who sought to hunt for bargains in the morning but they turned sellers later in tandem with a fall in US stock futures in after-hours trading," Yutaka Miura, senior technical analyst at Mizuho Securities Co., was quoted as saying.

Large-capped technology shares found favor on hopes that a hefty US stimulus package that will be be voted on in the US House of Representatives this week will come to fruition and trigger the pandemic-hit economy's recovery.

From a broader perspective, traders here said that the pace of the world's largest economy's recovery would have a bearing on the global economic revival.

"We could see the scale of the stimulus plan on Friday and hopes grew about a faster recovery in the US economy and corporate earnings," Masahiro Ichikawa, chief market strategist at Sumitomo Mitsui DS Asset Management Co., was quoted as saying.

By the close of play, electrical appliance, air transportation, marine transportation and nonferrous metal issues comprised those that advanced the most.

Technology issues gaining traction included Screen Holdings adding 3.5 per cent and Tokyo Electron soaring 6.3 per cent.

Shipping issues advanced on hopes for the global economic recovery and increased physical trade in the near future as Covid-19 vaccination gather pace around the the world.