Tokyo: Stocks finish slightly higher as robust earnings offset by profit-taking

[TOKYO] Tokyo stocks finished slightly higher on Monday as market sentiment was lifted on a slew of upbeat earning reports by Japanese companies, although gains were capped since investors moved to lock in gains from a three-day increase from last week.

The 225-issue Nikkei Stock Average finished 166.83 points or 0.56 per cent higher from Friday at 29,776.80.

The broader Topix index of all First Section issues on the Tokyo Stock Exchange closed 7.92 points or 0.39 per cent higher at 2,048.52.

Trading volume on the main section decreased to 1,163.41 million shares from Friday's 1,321.45 million shares.

The US dollar against the Japanese yen was relatively weak in the upper 113 yen range, following that US consumer sentiment in early November declined to its lowest level in years.

With the support of strong earning reports released on Friday and gains on the US stock market late last week, Tokyo stocks opened high in the morning but later moved in a narrow range throughout the day as investors started to lock in profit with the benchmark Nikkei approaching the psychological threshold of 30,000.

Masahiro Ichikawa, the chief market strategist at Sumitomo Mitsui DS Asset Management Co, said: "Shares were initially buoyed by advances in US shares, but a lack of fresh trading cues in the afternoon kept investors from chasing the upside."

According to preliminary data released by the Cabinet Office, Japan's gross domestic product in the July-September period shrank a real 0.8 per cent from the previous quarter, or an annualised 3.0 per cent, amid a Covid-19 state of emergency that once covered 21 out of the country's 47 prefectures, as well as sluggish car sales and exports due to global chip and parts shortages.

However, the market showed limited reaction to the weaker-than-expected data, brokers said.

By the close of play, service, pulp and paper and transportation equipment sectors headed the advance. Gaining issues outnumbered losing ones 1,054 to 1,029 on the First Section, while 100 finished unchanged.

Following upbeat earnings that beat market expectations and an upward revision of their performance forecast, Tokyo Electron Device Ltd gained 1.0 per cent, and restaurant chain operator Skylark Holdings surged 6.5 per cent.

Among other high-tech stocks, Taiyo Yuden increased 2.4 per cent, Screen Holdings ended up 1.1 per cent, and Murata Manufacturing advanced 1.2 per cent.

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