TOKYO, May 6 (Reuters) – Japanese shares gained on Thursday to mark their biggest percentage gain in two weeks, as investors scooped up cyclical shares following Wall Street gains, although the gains were capped by technology shares that tracked the Nasdaq lower.
The Nikkei share average advanced 1.8% to close at 29,331.37, while the broader Topix gained 1.54% to 1,927.40. The market reopened on Thursday after three days of public holidays.
“The market rebounded after sell-offs before the Golden Week holiday when investors were too cautious about the market outlook,” said Shoichi Arisawa, general manager of the investment research department at IwaiCosmo Securities.
“The strong U.S. market also supported sentiment today. But I am not sure how long this will last because the (coronavirus) situation in Japan is very different from that in the U.S.”
The Dow Jones Industrial Average ended at a record high on Wednesday, driven by economically sensitive sectors, while the Nasdaq Composite ended lower as Treasury Secretary Janet Yellen suggested an interest rate hike.
While the U.S. economy has shown signs of recovery from the COVID-19 lows, Japan’s economy still remains under strain, with the nation considering extending a state of emergency in Tokyo and other major urban areas.
Tokyo Governor Yuriko Koike said on Thursday an extended state of emergency was needed to contain infections that are straining the capital’s medical system.
Material makers led gains, with steel makers JFE Holdings and Nippon Steel surging 8.00% and 7.50%, respectively, making them the top gainers on the Nikkei index. Paper maker Oji Holdings jumped 6.97%.
Technology shares weighed on the indexes, with Advantest falling 1.54%. Tokyo Electron inched up 0.89% even as its annual operating profit forecast of 442 billion yen ($4.04 billion) beat analysts’ forecast.
Nissan Motor rose 2.92%, after the carmaker sold its roughly 1.5% stake in German carmaker Daimler. (Reporting by Junko Fujita; editing by Uttaresh.V)
