Japan's Topix ends at 33-year peak after bargain hunting

JAPAN’S Topix index closed at a 33-year high on Friday (Sep 1) in a broad rally as investors looked for bargains and scooped up undervalued stocks, with Sony Group and financials leading the gains.

The broader Topix climbed 0.76 per cent to 2,349.75, its highest close since July 1990. The index advanced 3.7 per cent for the week, its sharpest gain since the week ended Oct 7 2022.

The Nikkei rose 0.28 per cent to 32,710.62 and posted a weekly gain of 3.44 per cent.

“Investors bought shares broadly. Particularly individual investors scooped up stocks with high dividend payouts on dips,” Shigetoshi Kamada, general manager at the research department at Tachibana Securities.

“That is lifting the market when appetite from overseas investors has slowed down.”

Strong demand from foreign investors for heavyweight stocks had lifted the benchmark Nikkei to a 33-year high in June, but they took a pause from buying recently, with data showing two consecutive weeks of foreign outflows from Japanese equities.

Game and audio equipment maker Sony Group jumped 3.21 per cent to provide the biggest boost to the Topix, followed by Mitsubishi UFJ Financial Group that rose 1.7 per cent.

Shares of staffing agency Recruit Holdings rose 3.21 per cent.

The rally followed the Nikkei’s rebound from a two-month low in the middle of August.

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“Some investors had expected the Nikkei could fall close to 30,000 but it was firmer. Those investors were forced to buy back stocks now,” said Shuutarou Yasuda, market analyst at Tokai Tokyo Research Institute.

“The strength is supported by the US economy, which looks likely to make a soft landing and avoid negative growth.”

All but one of the 33 industry sub-indexes of the Tokyo Stock Exchange advanced, led by energy explorers, which rose 3.2 per cent.

The pharmaceutical sector fell 0.21 per cent, with Eisai down 1.48 per cent to become the worst performer in the Nikkei. REUTERS