Nikkei edges up as investors hunt for value shares

  • Reuters
  • Stock Market News
Nikkei edges up as investors hunt for value shares
Credit: © Reuters.

TOKYO, March 3 (Reuters) - Japanese shares eked out gains on Wednesday as investors picked up cyclical stocks on hopes of a quicker economic recovery from the pandemic-led recession.

However, gains were capped by worries about bond market volatility and talk of huge selling for rebalancing this month.

The Nikkei average .N225 ticked up 0.18% to 29,459.71, with its 25-day moving average at 29,273 providing a support for now. The broader Topix .TOPX rose 0.15% to 1,897.64.

Investors bought cyclical shares with cheap valuation, such as steelmakers, automakers and trading houses.

Nippon Steel 5401.T rose 4.1%, while Nissan Motor 7201.T rose 2.8%. Trading house Marubeni 8002.T rose 3.3%.

Topix Value Index .TOPXV rose 0.77% as growth-oriented shares .TOPXG lost 0.48%, led by declines in high-flying momentum shares as well as chip-related stocks, in a sign of investor caution against their lofty valuation.

Electric-motor maker Nidec 6594.T fell 3.1% while medical portal operator M3 2413.T lost 2.1%. Chip-making machine maker Tokyo Electron 8035.T shed 1.8%.

As the Topix has risen about 35% so far in the current Japanese financial year ending on March 31, market players are getting wary the country's pension funds could sell a large amount of shares for rebalancing by the financial year-end.

Many investors are still not sure whether a sell-off in global bonds, which hit the market in recent weeks, is over, despite signs of some stability in the last few sessions.

"The market is looking to a speech by Federal Reserve Chairman Jerome Powell on Thursday. Friday's U.S. payroll data could rekindle talk of a Fed rate hike if it is strong," said Takuya Hozumi, global investment strategist at Mitsubishi UFJ Morgan Stanley (NYSE: MS ) Securities.

Elsewhere, publicly-traded shares in the Bank of Japan 8301.T rose by daily limit for three days in a row. BOJ shares are not electronically settled, however, and investors need to file paper documents to the central bank when they own the securities.

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