Tokyo: Shares close at 29-year high on GDP rebound, vaccine race
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[TOKYO] Japanese stocks touched a 29-year high on Monday after the economy posted its first expansion in four quarters and as progress in developing a Covid-19 vaccine continued to lift global markets.
The Nikkei 225 Index ended 2.05 per cent firmer at 25,906.93, its highest close since June 1991. The broader Topix gained 1.68 per cent to 1,731.81.
Japan's economy grew at a faster-than-expected annualised rate of 21.4 per cent in July-September, which follows a 28.8 per cent plunge in April-June.
Sentiment also got a boost after China data showed that factory output in the world's second-largest economy rose faster than expected last month and retail sales sped up, as the recovery from its Covid-19 slump gathered momentum.
Vaccine optimism outshone worries about rising Covid-19 cases globally, with news from Johnson & Johnson giving markets a further lift. The US drugmaker launched a late-stage trial of its vaccine on Monday, which follows promising developments last week from Pfizer and Moderna.
Though some analysts advise caution as the United States and Europe are reintroducing restrictions to contain a surge in new infections, which could increase market volatility.
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"There might be some correction in the short term, but the news that several vaccines are in late-stage development suggests the downside is limited," said Masayuki Kichikawa, chief macro strategist at Sumitomo Mitsui Asset Management.
The stocks that gained the most among the top 30 core Topix names were Honda Motor up 4.84 per cent, followed by Mitsubishi UFJ Financial Group up 3.48 per cent.
The underperformers among the Topix 30 were Nintendo down 1.91 per cent, followed by Takeda Pharmaceutical that lost 0.97 per cent.
Shares of Rakuten rose 1.19 per cent after the internet commerce company said it will team up with private equity firm KKR to buy a controlling stake in Japanese retailer Seiyu.
There were 205 advancers in the Nikkei index against 19 decliners.
The volume of shares traded on the Tokyo Stock Exchange's main board was 1.41 billion, compared with the average of 1.12 billion in the past 30 days.
REUTERS
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