Japan's Nikkei rises as solid economic growth, US rate cues buoy sentiment

Kawasaki Heavy Industries

15/08/2024 07:28

(Updates with closing levels)
    By Brigid Riley
       TOKYO, Aug 15 (Reuters) - Japan's Nikkei share average
rose on Thursday, as data showed better-than-expected economic
growth in the June quarter and Wall Street closed higher
overnight on September rate cut prospects in a boost to investor
sentiment.
    The Nikkei  .N225  closed 0.8% higher at 36,726.64, locking
in a fourth straight day of gains, while the broader Topix
 .TOPX  finished up 0.7% at 2,600.75.
    Stocks sensitive to the economy's performance rose after
data showed Japan's economy expanded by a faster-than-expected
annualised 3.1% in April-June.
    Banks  .IBNKS.T  rose 2.8% to lead sectoral gains, while
both securities firms  .ISECU.T  and oil and coal producers
 .IPETE.T  gained 2.7%.
    The positive economic news gave support as investors
continued to buy shares that have underperformed since last
month, said Kenji Abe, chief strategist at Daiwa Securities.
    "Japanese equity prices plunged from mid-July to early
August and are now quite undervalued," he said.
    The Nikkei tanked 12.4% on Aug. 5 in its biggest single-day
fall since Black Monday amid U.S. recession fears and a sharply
stronger yen.
    It has since clawed back all the losses from that fall but
remains well off an all-time peak of 42,426.77 touched on July
11.
    Wall Street also lent some support to the Nikkei on
Thursday. U.S. stocks closed higher on Wednesday as fresh
inflation data reassured investors that the Federal Reserve
would start cutting rates next month.  .N 
    Japanese equities' gains narrowed somewhat during afternoon
trade as investor attention turned toward U.S. retail sales and
weekly unemployment data due later in the day to gauge the
health of the world's largest economy.
    Among individual stocks, Fast Retailing  9983.T  climbed
2.1% to give the Nikkei the biggest lift, followed by
chip-making equipment giant Tokyo Electron  8035.T , up 1.5%,
and AI-focused startup investor SoftBank Group  9984.T  adding
2.2%. 
    The largest percentage gainers in the Nikkei were Dentsu
Group  4324.T , up 9.8%, followed by Socionext  6526.T  gaining
7.9% and Kawasaki Heavy Industries  7012.T  up by 7.4%.

 (Reporting by Brigid Riley; Editing by Subhranshu Sahu and
Eileen Soreng)
 ((brigid.riley@thomsonreuters.com;))