Nikkei rallies, draws support from China stimulus hopes

  • Reuters
  • Stock Market News
Nikkei rallies, draws support from China stimulus hopes
Credit: © Reuters.

* Nikkei up for 2nd day, not enough to offset Monday's losses

* Steelmakers, metal firms climb on China stimulus hopes

* Nikkei has a resistance level at 23,000

* About 40 companies to announce earnings on Wednesday

By Tomo Uetake

TOKYO, July 25 (Reuters) - Japanese shares rallied for a second day on Wednesday, buoyed by gains in steelmakers and metal producers, as markets cheered Beijing's pledges of a more vigorous fiscal policy.

The benchmark Nikkei share average .N225 rose 0.46 percent to 22,614.25, erasing more than half of its losses from Monday after media reports that the Bank of Japan may adjust its policy.

Still, the upside was seen as limited for now with the 23,000-mark considered a stubborn resistance for the Nikkei.

Some sectors of the market "have certainly got a boost from the news of China stimulus plans," said Yuya Fukue, trader at Rheos Capital Works. "I think the hopes will continue to provide a tailwind for some time."

The biggest beneficiaries included steelmakers .ISTEL.T , non-ferrous metal firms .INFRO.T and machinery makers .IMCHN.T , which rose 2.0 percent, 2.3 percent and 1.0 percent, respectively.

They have been among the worst hit by concern over a Sino-U.S. trade war.

Among them, JFE Holdings 5411.T rose 3.0 percent and Sumitomo Metal Mining 5713.T 3.8 percent.

Their rebound came after Chinese state radio, citing the cabinet, said earlier this week that Beijing would adopt a more vigorous fiscal policy to help tackle external uncertainties without resorting to strong policy stimulus. the overall trend, Yamato Holdings 9064.T dropped 1.7 percent after the logistics provider announced it overcharged corporate clients by about 1.7 billion yen ($15 million) for moving services, prompted by a whistleblower's alert.

The Nikkei's heavyweight Fast Retailng 9983.T fell for the third trading day in a row, down 0.7 percent, hit by speculation that the Bank of Japan could wind back its purchases in the Nikkei-linked exchange-traded funds.

Reuters and other media reported over the weekend that the BOJ could debate changes in its monetary policy at its meeting early next week, with potential tweaks to its interest rate targets and stock-buying techniques on the table. broader Topix .TOPX gained 0.38 percent to 1,753.48, while the JPX-Nikkei Index 400 .JPXNK400 was up 0.39 percent at 15,517.35.

Mitsubishi Motor 7211.T dropped 3.9 percent on profit-taking, pulling away from nine-month highs marked the previous day. The automaker announced earnings that beat market expectations on Tuesday. fiscal first-quarter earnings season enters full swing on Wednesday, with about 40 companies, including Shin-Etsu Chemical 4063.T , Nidec 9594.T and Fanuc 6954.T , announcing results.

($1 = 111.29 yen)

Drop an image here or Supported formats: *.jpg, *.png, *.gif up to 5mb

Error: File type not supported

Drop an image here or