Nikkei moves higher after Wall Street rebounds

Stocks bounced back moderately Monday following Wall Street’s rebound late last week, but their upside was capped amid a wait-and-see mood prior to a key economic event in Europe later this week.

The Nikkei 225 average climbed 150.13 points to end at 17,014.29. On Friday, the key market gauge tumbled 244.54 points.

The Topix closed up 8.68 points at 1,372.41 after falling 12.87 points Friday.

The TSE kicked off the week with gains after the Dow Jones industrial average snapped a five-session losing streak Friday following a rise in crude oil prices and a better than expected consumer confidence index for January.

After the initial buying ran its course, however, the TSE’s upside was limited by a wait-and-see mood before the U.S. market reopened for the week and the European Central Bank’s closely watched monetary policy meeting Thursday, brokers said.

Throughout Monday, the Nikkei hovered around the 17,000 line in the absence of fresh incentives, brokers said.

A plunge in Shanghai equities and a halt in the yen’s easing also weighed down Tokyo stock prices in the afternoon, brokers said.

Still, the key indexes maintained their strength for the rest of the day.

“A recovery trend in the U.S. economy and investor belief that Tokyo stocks have been undervalued triggered buying on dips and underpinned the market’s downside,” said Hiroichi Nishi, equity general manager at SMBC Nikko Securities Inc.

An official at a major securities firm said, however, it will be difficult for investors to step up purchases until they confirm the results of key events overseas, such as the ECB meeting and the Greek general election on Sunday.

In particular, expectations are high for the ECB to announce a quantitative easing policy at the upcoming meeting, brokers said.

Winners overwhelmed losers 1,152 to 561 in the first section, while 147 issues were unchanged.

Volume decreased to 2.04 billion shares from Friday’s 2.71 billion.

H.I.S. jumped 4.31 percent after a foreign brokerage firm upgraded its stock price target on the travel agency, brokers said.

Higher crude oil futures in New York brightened resource-related names. Among them were oil developer Inpex and trading houses Sumitomo and Itochu.

On the other hand, electronics giant Sharp plunged 8.73 percent on heavy selling triggered by a newspaper report Monday that the company is expected to incur a group net loss in the year to March 2015, falling short of its own projection of a profit.

Other major losers included automaker Toyota, Japan Tobacco, and megabank groups Sumitomo Mitsui and Mitsubishi UFJ.

In index futures trading on the Osaka Exchange, the key March contract on the Nikkei climbed 240 points to end at 17,040.

Nikkei Futures

nikkeifutures.org@imediaone.com

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