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Tokyo: Stocks edge up in volatile trade after Wall Street rally
[TOKYO] Tokyo stocks rebounded slightly in a rollercoaster session on Wednesday after Wall Street finished the previous day with solid gains following a global rout.
The benchmark Nikkei index, which on Tuesday fell nearly 5 per cent in the worst loss since the November 2016 election of Donald Trump as US president, rose 0.16 per cent or 35.13 points to close at 21,645.37.
The broader Topix index gained 0.37 per cent or 6.50 points to 1,749.91.
The Nikkei index opened sharply higher, surging nearly 3.5 per cent at one point as investors bought on dips following the recent slumps.
"If the New York Dow stops falling, foreign selling of Japanese stocks will likely cease," said Masayuki Kubota, chief strategist at Rakuten Securities.
"Given that the Japanese economy and corporate earnings are good, it is highly likely that 21,078 will be the bottom of the latest crash," he said in a note, referring to the Nikkei's intraday low on Tuesday when the key index was down more than seven per cent.
But early gains were gradually eroded.
"Investors are still nervous and uncertain if the market is now on course to recovery," said Shinichi Yamamoto, broker at Okasan Securities in Tokyo.
"We need to keep an eye on the opening in New York later today," Mr Yamamoto told AFP.
On Tuesday bargain-hunters swooped in to buy Wall Street stocks, stemming a haemorrhage that had been spreading panic among investors globally.
After Asian and European equity markets plunged on Tuesday, New York stocks started their trading day with another jaw-dropping fall as the Dow index dived nearly three per cent, adding to the previous day's record loss.
But within minutes a fierce battle appeared to be playing out between those betting on further declines, and those who thought that the market correction had gone too far, leading to some wild price gyrations.
The blue-chip Dow Jones Industrial Average closed up 2.3 per cent at 24,912.77.
The dollar was changing hands at 109.20 yen in Asia on Wednesday against 109.57 yen in New York.
In individual Tokyo stocks, Toyota jumped 1.18 per cent to 7,372 yen a day after the auto giant upgraded annual profit forecasts, as Honda gained 0.78 per cent to 3,840 yen.
Sony rallied 1.51 per cent to 5,417 yen with Panasonic up 2.10 per cent at 1,599.5 yen.
Mobile operator and IT investor SoftBank was up 3.81 per cent at 8,688 yen ahead of the release of its earnings report later Wednesday.