Topix closes at near one-month high as investors await earnings
13/07/2021 07:47
TOKYO, July 13 (Reuters) - Japanese stocks gained on
Tuesday, with the broad Topix .TOPX index hitting a near
one-month high, after markets recovered from last week's
sell-off and awaited a slew of corporate earnings for a fresh
readout on the country's economic health.
Nikkei share average .N225 closed 0.52% higher at
28,718.24, while the broader Topix .TOPX gained 0.73% to
1,967.64, its highest close since June 16.
Both indexes have quickly recovered from last week's tumble,
which many investors attributed to concerns over Delta variant
as well as big selling from Exchange Traded Funds (ETFs) related
to their dividend payment.
U.S. earnings season kicked off this week and many Japanese
companies are expected to announce their quarterly numbers from
this month-end until mid-August, making earnings the main focus
of the market.
A broad range of stocks gained, with all but four of the
Tokyo Stock Exchange's 33 industry sub-indexes trading in the
black.
Cyclical, value-oriented shares led the gains, including
shippers .ISHIP.T , securities brokerages .ISECU.T , and
insurers .IINSU.T .
Value-oriented shares .TOPXV outperformed with gains of
1.1%, compared with a 0.4% rise in growth shares .TOPXG .
"I am a bit cautious about the outlook, though. Growth
shares are expensive and it will take some time before their
earnings will catch up with expectations. On the other hand,
value shares have risen over the past seven months or so and
looking at the past their rally has not lasted longer than
that," Takenori Yamamoto, portfolio manager at Norinchukin
Zenkyoren Asset Management said.
Tama Home 1419.T soared 17.6% to its record high after the
home builder posted upbeat earnings due to stronger
post-pandemic demand.
Cosmos Pharmaceutical 3349.T gained 9.3% after the
drugstore chain operator posted forecast-beating earnings.
Kakuyasu 7686.T dropped 3.3% after the alcohol retailer
withdrew its earnings outlook for the current year through March
2022, citing uncertainties due to the government's renewed bans
on alcohol being served in restaurants.
(Reporting by Hideyuki Sano, Editing by Sherry Jacob-Phillips)
((hideyuki.sano@thomsonreuters.com; +81 3 4520 1195;))