Nikkei follows global markets higher as Italian fears fade for now
Tue Dec 06 2016
Austin Collins (257 articles)

Nikkei follows global markets higher as Italian fears fade for now

TOKYO : Japan’s Nikkei share average rebounded on Tuesday as strong U.S. economic data helped offset worries about instability in the European Union after Italian Prime Minister Matteo Renzi’s resignation.The Nikkei rose 0.9 percent to 18,434.08 points by midmorning trade, supported by financials, exporters and real estate stocks.

Japanese stocks have climbed around 7 percent since the U.S. election last month, fuelled by expectations of significant economic stimulus and cuts in corporate taxes and regulations under President-elect Donald Trump.

Those views have pushed up the dollar, weakening the yen and offering to boost earnings for Japanese exporters.

“The market is consolidating a recent run of gains as every asset class soared too fast,” Yutaka Miura, a senior technical analyst at Mizuho Securities, referring to stocks, the dollar-yen moves and bond yields.

Gains in U.S. shares overnight supports sentiment in Japanese equities, after U.S. services sector activity hit a one-year high in November, with a surge in production boosting hiring, further evidence of strength in the economy that clears the way for the Federal Reserve to raise interest rates next week.

Italian voters’ rejection of a constitutional referendum on Sunday stoked worries about Italy’s political stability and its banking system but financial markets recovered from an initial fright with stocks, euro rebounding and bond yields rising as investors concluded the fallout from Renzi’s resignation could be contained.

Of the Topix’s 33 subsectors, 26 were in positive territory, with Nomura Holdings rising 2.4 percent, Mitsubishi UFJ Financial Group adding 1.1 percent and Toyota Motor Corp gaining 0.8 percent.

Meanwhile, trading house Mitsui & Co soared 2.0 percent after it said that it has agreed to buy a 20 percent stake in four blocks in the U.S. offshore oil and gas fields in the Gulf of Mexico from Royal Dutch Shell Plc for an undisclosed amount.

The broader Topix rose 0.5 percent to 1,474.72 and the JPX-Nikkei Index 400 gained 0.5 percent to 13,221.65.

Austin Collins

Austin Collins

Austin Collins is our Europe, Asia, & Middle East Correspondent. He covers news related to Stock Market. In past he has worked for many prestigious news & media organizations. He is based in Dubai

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