Tokyo stocks rise to 1 week high on hopes of coronavirus slowdown, Wall St rally

  • Reuters
Tokyo stocks rise to 1 week high on hopes of coronavirus slowdown, Wall St rally

SYDNEY, April 7 (Reuters) - Tokyo shares advanced on Tuesday, supported by tentative signs of the coronavirus outbreak being contained in New York and other global hot spots, with long-only investors still awaiting details of Japan's massive economic stimulus package.

The benchmark Nikkei average .N225 gained 2.0% to 18,950.18, its highest closing since March 31, tracking sharp gains in Wall Street stocks overnight.

U.S. stocks rallied on Monday, with the S&P 500 .SPX , Dow Jones Industrial Average .DJI , and Nasdaq Composite .IXIC all rallying more than 7%, encouraged by the slowing death toll from the virus in global hot spots, including New York and Italy. .N

The broader Topix .TOPX rose 2.0% to 1,403.21, also a highest closing level in a week, with all of the 33 sector sub-indexes on the exchange finishing in positive territory.

Stocks that were battered more in recent weeks fared better on Tuesday.

Tokyo Electron Ltd 8035.T climbed 5.7% and Advantest Corp 6857.T soared 12.7% after U.S. Philadelphia semiconductor index .SOX jumped 10.4% overnight. Samsung Electronics Co Ltd 's 005930.KS better-than-expected profit also provided a tailwind. traders said it is just a short-covering rally and lacks conviction, with many long-term investors still waiting for the details of Japan's $1-trillion economic stimulus package.

Indeed, overall activity was subdued, with the volume of shares traded on the main board valued at 2.82 trillion yen, well below its average over the last 20 days of 3.51 trillion yen.

On the flip side, shares that gained recently were pressured by profit taking.

Fujifilm Holdings Corp 4901.T , which produces of Avigan anti-flu drug, a potential COVID-19 treatment, retreated 5.5% after hitting a record high on Monday.

Drugstore chain operator Welcia Holdings Co Ltd 3141.T and web/TV conferencing services provider V-cube Inc 3681.T shed 5.2% and 7.2%, respectively.

The Japanese government is planning to finalise a massive stimulus package worth 108 trillion yen - equal to 20% of Japan's economic output - to cushion the heavy impact of the pandemic on the world's third-largest economy. proposed large stimulus package is a very positive step. But markets have already begun to price in the passage of a 60 trillion yen stimulus, including a fiscal outlay of 20 trillion yen," said Naoya Oshikubo, senior economist at SuMi TRUST.

"So unless the measures announced are even larger than forecast, market sentiment will not improve in the short-term -- the yen will not weaken and the stock market will not rally."

Prime Minister Shinzo Abe will hold a news conference at 7 p.m. (1000 GMT).

Abe is also set to announce a state of emergency on Tuesday for the capital, Tokyo, and six other prefectures to stem a worrying rise in coronavirus infections in major population centres.

Elsewhere, Nitori Holdings Co Ltd 9843.T climbed 6.9% after the discount furniture store operator forecast operating profit to grow 4.4% in the current business year through February, even after taking into account the potential impact of the coronavirus outbreak. Pharmaceutical Co Ltd 4502.T added 3.9% on the news that blood products giant CSL Behring has joined forces with the Japanese drugmaker to develop a COVID-19 plasma treatment.

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

Error: File type not supported

Drop an image here or

100