Tokyo shares jump back into the black after sharp losses

By: 9 years ago

A worker of Tokyo Stock Exchange monitors stock prices on an electric screen during a trading session in Tokyo, Monday, Aug. 24, 2015. Stocks tumbled across Asia on Monday as investors shaken by the sell-off last week on Wall Street unloaded shares in practically every sector. AP Photo

TOKYO, Japan—Tokyo’s benchmark index rebounded sharply Tuesday morning as a measure of calm returned to the market after five days of falls driven by fears Chinese growth is stalling.

The Nikkei 225 at the Tokyo Stock Exchange, which plunged more than four percent at the open, added 1.10 percent, or 204.22 points, to sit at 18,744.90 by the break.

The broader Topix index of all first-section shares jumped 1.46 percent, or 21.66 points, to 1,502.53, also clawing back big losses.

On Monday, the Nikkei plunged more than four percent to close at a six-month low.

Tokyo investors pressed the sell button again after the opening bell Tuesday, but late morning bargain buying helped push stocks back into the black as other Asian markets also recovered.

“Valuations have gotten quite cheap and technically speaking we’ve seen a very significant selloff,” Toshihiko Matsuno, chief strategist at SMBC Friend Securities, told Bloomberg News.

David McDonald, an investment strategist at Credit Suisse Group AG’s wealth management and private banking unit, said markets were taking a better look at the state of the world economy after Monday’s free fall in world equities.

“Our bottom line is that the world’s still not a bad place,” he told Bloomberg News.

The view was echoed by the government, with top spokesman Yoshihide Suga describing the Japanese economy as “on a gradual recovery trend.”

Still, the government is “carefully” monitoring markets, he said, adding that it is “in constant communications with other members of the Group of Seven, and will take necessary actions when necessary.”

Tokyo stocks got a boost as the dollar recovered some ground against the yen, with the greenback fetching 119.83 yen, up from 118.51 yen in New York trade Monday. A weaker yen is a plus for the profitability of Japanese exporters.

Toyota shares jumped 1.89 percent to 7,126 yen, Sony bounced 5.26 percent to 2,993 yen while market heavyweight Fast Retailing, operator of the Uniqlo chain, ticked up 0.04 percent to 50,920 yen.

The latest global sell-off stemmed from increasing worries that China’s slowing growth might drag down the world economy.

Shanghai stocks tumbled almost 8.50 percent Monday, wiping out this year’s gains, and sending shares in Europe and New York plunging.

On Wall Street, the Dow Jones Industrial Average plunged more than 1,000 points, or six percent, before trimming its losses to end down 3.58 percent while the broad-based S&P 500 tumbled 3.94 percent.