Nikkei rises as value shares snatched up

Nikkei rises above 200-day average as value shares snatched up

AP/PTI photo

Japan's Nikkei share average rose on Thursday, vaulting above a key technical resistance of its 200-day moving average on hopes of a quick economic normalisation, with investors snatching up deeply discounted stocks such as financials.

The positive mood overwhelmed concerns about deteriorating U.S-China relations as Washington signals it may no longer regard Hong Kong warranted special treatment as Beijing prepares new security law for the territory.

The Nikkei average advanced 1.43% to 21,725.54, rising above a major chart point of 200-day moving average at 21,656. The broader Topix gained 1.12% to 1,566.79. Both indexes hit their highest levels since late February.

Gains were led by short-covering in value-oriented shares, such as financials and steelmakers -- the sectors that had been badly hit since the global outbreak of the novel coronavirus.

Banks jumped 4.2%, while securities brokerages gained 3.5% and insurers rose 3.3%. Steelmakers added 3.9%.

Including those, value shares rose 2.0% compared with 0.7% in growth-oriented shares.

Nissan Motor rallied 7.9% and Mitsubishi Motor rose 5.3% after the two automakers, along with Renault , announced a revival plan, pledging to cut vehicle ranges and pool manufacturing by region.

Dentsu soared 14.5% after the PR firm reported profits for the three months to March, compared to a net loss a year earlier, even as it withdrew annual guidance due to uncertainty over COVID-19.

Recruit Holdings gained 2.9% even after its earnings for January-March announced the previous day fell short of market expectations. 

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