BUSINESS Tokyo stocks close flat on bargain hunting amid concerns over coronavirus headwinds

BUSINESS

Tokyo stocks close flat on bargain hunting amid concerns over coronavirus headwinds

Xinhua

19:55, March 04, 2020

TOKYO, March 4 (Xinhua) -- Tokyo stocks closed essentially flat Wednesday in choppy trade as investors sought out issues oversold recently and snapped up bargains, while others offloaded issues on concerns over the global economic impact of the coronavirus.

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File photo: CGTN

The 225-issue Nikkei Stock Average edged up 17.33 points, or 0.08 percent, from Tuesday to close the day at 21,100.06.

The broader Topix index of all First Section issues on the Tokyo Stock Exchange, meanwhile, shed 2.62 points, or 0.17 percent, to finish at 1,502.50.

Local brokers said that stocks opened mixed on Wednesday as a comparatively firm yen against the U.S. dollar weighed on exporters as the U.S. Federal Reserve's surprise rate cut failed to bolster the market mood, although some investors sought out bargains after the market's recent decline.

The Federal Reserve cut its interest rate by 0.50 percentage point to underpin the world's largest economy in the face of potential downside risks associated with the coronavirus epidemic.

In later trade, issues advanced as investors seeking out bargains and chasing issues deemed oversold recently became more pervasive, with some investors hopeful that the Fed's rate cut may nudge other central banks to follow suit, which was a boon for real estate issues, but dented banking issues.

Heavily weighted Nikkei components such as Uniqlo casual chain store operator Fast Retailing finding favor also helped drag the market into positive territory, with the market's downside supported by a halt in the yen's appreciation against the U.S. dollar, which gave exporters some breathing space, market strategists here said.

Investment strategists also said that expectations the Bank of Japan (BOJ) would step up its purchasing of exchange-traded funds (ETFs) may have helped propel buying during trading hours Wednesday.

Buying ran its course, however, with trade becoming directionless, with some traders looking to lock in quick gains, while others adjusted positions over concerns the negative impact the coronavirus will have on the global economy.

Towards the end of trade, investors hit the sidelines and assumed a wait-and-see stance ahead of the release later in the day of key U.S. jobs and service sector sentiment data for February, market analysts said.

Real estate issues gained ground on hopes for central banks' rate cuts, with Mitsubishi Estate adding 2.0 percent, while Tokyu Fudosan Holdings climbed 3.2 percent. Sumitomo Realty & Development, meanwhile, ended the day 3.0 percent higher.

Conversely, financial issues lost ground on concerns that other central banks' may follow the Fed's lead in cutting interest rates, with Mizuho Financial Group dropping 1.9 percent, Mitsubishi UFJ Financial Group losing 2.2 percent, while Sumitomo Mitsui Financial Group ended the day 2.1 percent lower.

By the close of play, real estate and information and communication issues led advancers, while bank and insurance-oriented issues comprised those that declined the most, and issues that fell outpaced those that rose by 1,265 to 802 on the First Section, while 95 ended the day unchanged.

On the main section on Wednesday, 1.507 billion shares changed hands, dropping from Tuesday's volume of 1.764 billion shares.

The turnover on the third trading day off the week came to 2,524.4 billion yen (23.48 billion U.S. dollars). Enditem

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