Tokyo: Nikkei bounces strongly from 3-month low as US futures gain

JAPAN’S Nikkei rebounded strongly from a 3-month low on Tuesday (Jun 21), as investors cheered a rise in US stock futures and scooped up beaten-down cyclical shares.

The Nikkei stock average ended the day up 1.84 per cent at 26,246.31, after gaining as much as 2.5 per cent during the session. At the start of the week, the benchmark index had dipped to a low of 25,520.23 for the first time since Mar 16.

The rally was broad-based, with 213 of the Nikkei’s 225 components rising, while 10 fell and 2 traded flat.

The broader Topix advanced 2.05 per cent to 1,856.20.

US stock markets, which were closed on Monday for a holiday, looked set to rise, with S&P 500 e-mini futures last up 1.47 per cent. European stocks gained overnight, with the pan-European Stoxx 600 index finishing 1 per cent higher.

“You can call this a rebound in an oversold market, but the speed of the gains is creating some panic among the people who sold at the bottom,” said a market participant at a domestic securities company.

Cyclical stocks rebounded after Monday’s fall. Japan Airlines and rival ANA Holdings rallied 3.42 per cent and 2.88 per cent, respectively.

Tech also had several big winners. Sony Group jumped 3.99 per cent, while startup investor SoftBank Group advanced 2.88 per cent.

Chip-making equipment manufacturers Tokyo Electron and Advantest rallied ended 2.55 per cent and 2.38 per cent higher.

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Automakers were firm, with the yen hovering near its weakest level in more than 2 decades. Toyota gained 2.35 per cent and Nissan rose 3.23 per cent.

The best-performing sector on the Nikkei was energy, which rallied 3.74 per cent amid higher crude oil prices. Defensive utilities trailed, but were still higher by 0.59 per cent. REUTERS