Nikkei rebounds 1.2 pct from 6-wk low, helped by relative calm in Ukraine

Mon Mar 17, 2014 11:00pm EDT

* Nikkei tracks gains on Wall St on relief over Crimea vote,
firm U.S. data
    * Short-covering main driver of Nikkei after record
short-selling previous day
    * Concerns about impact of planned sales tax hike weigh on
Japanese shares
    * Mitsubishi Elec gains on dividend increase

    By Hideyuki Sano
    TOKYO, March 18 (Reuters) - Japanese shares rebounded on
Tuesday, taking heart from gains on Wall Street on the back of
relief that Crimea's vote to join Russia passed without major
violence and on fairly upbeat U.S. data.
    The Nikkei share average rose 1.2 percent to 14,452.33
, recovering from a six-week closing low hit on Monday,
though it is still down over five percent from a five-week high
around 15,300 reached on March 7.
    Worries about the economic impact of Tokyo's planned sales
tax hike in April, slowing growth in China and the crisis in
Ukraine have weighed on the market in recent weeks.
    Overnight gains on Wall Street, supported by data showing
manufacturing output recorded its largest increase in six months
in February, helped improve the mood.      
    Traders said that cautious investors were now looking ahead
to Russian President Vladimir Putin's address to the parliament
on Crimea later in the day. 
     "I think markets had already expected Crimea's
independence. We have to see what Putin will say but assuming he
does not make bombshell announcements, the Nikkei is likely to
test this month's high again," said Soichiro Monji, chief
strategist at Daiwa SB Investments.
    Short-covering was likely driving much of the buying on
Tuesday, especially as the ratio of short-selling in overall
sales in the Tokyo Stock Exchange hit a record high of 36.17
percent the previous day.
    Mitsubishi Electric rose 3.1 percent after the
company raised its annual dividend payouts more than expected to
17 yen, the highest level since the company started closing book
on an annual basis in 1976.
    Glass and ceramics companies were the top
performer in the TSE's 33 sector subindexes after their sharp
fall on Monday.
    "Some of those who sold yesterday are probably buying back
today," said Hideyuki Ishiguro, senior strategist at Okasan
Securities.
    "The market is likely to regain stability but Japanese
shares' performance is exceptionally poor since concerns over
Ukraine hit global markets," suggesting domestic concerns were
also having a bigger impact on the market, he added.
    One big worry is that a planned sales tax hike in April
could hurt consumption at a time when overall economic growth
has slowed in recent quarters.
    Fading hopes of further near-term monetary stimulus by the
Bank of Japan have also dragged on sectors such as real estate 
 and securities brokerages, which were big
beneficiaries of the central bank's aggressive easing last year.
    Real estate companies were up 0.5 percent, underperforming
the overall market and were still down over 21 percent so far
this year.
    The broader Topix index rose 1.0 percent to 1,165.86
while the JPX-Nikkei Index 400, a gauge comprising
firms with high return on equity and strong corporate
governance, rose 1.0 percent.
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