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Tokyo shares end at 2-month peak as lockdown-exit hopes spur cyclicals

Published 2020/05/11, 08:46
Updated 2020/05/11, 08:48
© Reuters.

SYDNEY, May 11 (Reuters) - Japanese stocks closed at a two-month high on Monday as more countries prepare to reopen businesses from coronavirus-induced lockdown and on positive cues from Wall Street.

The benchmark Nikkei average .N225 gained 1.1% to 20,390.66 points, its highest closing since March 6, with cyclical sectors leading the rally.

The broader Topix .TOPX advanced 1.5% to 1,480.62, also its highest close in two months, with all but five of the 33 sector sub-indexes on the Tokyo exchange finishing higher.

Highly cyclical air transport .IAIR.T , sea transport .ISHIP.T and iron and steel .ISTEL.T were the top three performing sectors on the main bourse.

"Today's rally was led by some of the biggest laggards during the coronavirus sell-off such as the airlines sector," said Yasuo Sakuma, chief investment officer at Libra Investments.

Indeed, Japan Airlines 9201.T soared 9.8% and ANA Holdings 9202.T surged 10.6%.

Sakuma on Monday added long positions in a part-time jobs site operator that was also hit by the outbreak. "I think this trend will be accelerated if the government decides to ease coronavirus restrictions in some areas this Thursday."

Japan last week extended the nationwide state of emergency until the end of May, saying it would reassess the situation on May 14 and possibly lift the measures earlier for some prefectures. stocks have been rebounding since late March as economic activities restarted businesses from the lockdown put in place to curb the spread of the pandemic.

Among other nations, however, South Korea warned of a second wave of the new coronavirus as infections rebounded to a one-month high, while new infections accelerated in Germany. Street's three major indexes jumped on Friday after the April non-farm payrolls report proved dire, but not quite as awful as analysts had feared. .N futures for the S&P 500 index ESc1 rose as much as 0.6% in Asian trade.

Investors seem to be determined to focus on the positive as many cheered companies that could provide some sort of earnings outlook.

Sumco Corp 3436.T leaped 5.8% even after the semiconductor silicon-wafer producer reported a 41.2% drop in operating profit for the January-March quarter and forecast a 29.6% fall in the January-June period. Mitsumi Inc 6479.T jumped 6.1% as the industrial equipment maker managed to provide a profit outlook for the year through March 2021. Miraca Holdings Inc 4544.T closed up 19.7% to its daily limit high on hopes that the government could approve the company's test kits that can detect coronavirus antigens in about 15 minutes as early as next week.

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