Nikkei rides out of “aftershock” with an advance
Tokyo saw a turbulent day of trading end with small advances after it began its recovery from yesterdays 7.3 percent decline, the index’s largest one-day decline since the earthquake that hit the nation in 2011. The Nikkei clawed itself back from declines of 3.5 percent in afternoon trading to register gains of 0.9 percent. Despite the resistance and the bullish nature of trading at the start of the week, the index was down by 3.5 percent since Monday’s open.
When asked about the volatile nature of the market today, Kyoya Okazawa from BNP Paribas said “We are still in a market affected by the aftermath of yesterday’s jolt. It’s like when an enormous earthquake hits a region, people are prepared for an aftershock, and that’s what we are seeing now”.
The turbulence that we are seeing is being described as hesitation from investors who are not sure whether it is the right time to get back into the markets. China’s weak production data yesterday acted as a trigger for investors to lock in their profits from the recent rally on the back of a weakening Japanese Yen.
Despite all the negatives of the last 48 hours, the mood on the trading floor remains positive. The Nikkei has advanced by 18 percent since the early April and 40 percent since the turn of the year. With further weakening of the Yen on the horizon, many analysts are predicting further gains when this uncertainty clears.
The Nikkei’s biggest advance was from Tokyo Electric Power Co Inc who added 9.86 percent to their price, rising to 702 by the close of play. Exporter Sharp Corp enjoyed solid gains of 43 Yen, or 8.24 percent, taking their stock 565. The electronics company announced that they would be heavily marketing their new line of next generation televisions which will go on sale with a cost $4000 each, or $97 per inch.
Other climbers included COMSYS Holdings Corp, Meidensha Corp and Nisshin Steel Holdings who advanced by 7.61 percent, 7.39 percent and 6.62 percent respectively.
Those on the wrong end of the index were Toho Co Ltd who declined by 4.87 percent and Mitsui & Co Ltd who fell by 3.25 percent. Mitsubishi Corp fell by 62 Yen, or 3.14 percent, to 1915 after it announced that it planned a reduce capital by offsetting losses.