Nikkei rises to 2 1/2-week high

Reuters Updated - January 20, 2018 at 01:18 AM.

nikkei

Japan’s Nikkei soared to a 2 1/2-week high on Friday morning after risk sentiment recovered on Wall Street’s gains and the weak yen, but individual stocks such as Sharp Corp were also in focus.

Sharp stumbled 15 per cent after Taiwan’s Foxconn said it was delaying the signing of a deal to take over the company. On Thursday, it had ended 14 per cent lower ahead of Foxconn’s statement.

Sources told Reuters that Foxconn had put the takeover on hold after discovering previously undisclosed contingent liabilities that amounted to “hundreds of billions of yen’’.

The Nikkei rose 0.6 per cent to 16,241.89 in mid-morning trade after rising to as high as 16,472.50 earlier, the highest since February 9. The benchmark index has gained 2.7 per cent for the week.

The Nikkei has recovered 10 per cent from the 14,865.77 hit earlier this month, a level not seen since October 2014, as panic selling caused by low oil prices and the strong yen paused. But analysts said that concerns about these factors still outweigh optimism, and it may take some time for the market to regain its confidence.

“People are still worried about the global economic slowdown. The focus now is on whether financial leaders can cooperate and deliver a message to soothe investor sentiment,’’ said Kazuhiro Takahashi, an equity strategist at Daiwa Securities.

G20 meet

With fears about the recent market turmoil still lingering, investors are looking for reassurance from the finance ministers and central bankers of the Group of 20 nations, who are gathered in Shanghai for a two-day meeting starting Friday.

In Friday trade, attention was on the banking sector after merger talks among regional banks. Eighteenth Bank Ltd jumped 12 per cent after it and Fukuoka Financial Group agreed to merge next year.

The dollar flirted with 113.00 yen, almost two yen higher from this week’s trough, helping exporter shares to perform well. Honda Motor Co rose 2.0 per cent, Panasonic Corp added 2.0 per cent and Tokyo Electron Ltd surged 2.2 per cent.

The broader Topix gained 0.3 per cent to 1,311.18 and the JPX-Nikkei Index 400 advanced 0.3 per cent to 11,881.01.

Published on February 26, 2016 04:00