November 19, 2018 / 6:56 AM / 21 days ago

Nikkei rises as chip-related stocks, SoftBank recover; financials tumble

* Tokyo Electron, Advantest, SoftBank rebound

* SMFG hits 14-month low after U.S. yields drop

* 10-year JGB yield falls to lowest since late August

By Ayai Tomisawa

TOKYO, Nov 19 (Reuters) - Japan’s Nikkei share average rebounded on Monday after investors covered their short positions on chip-related stocks, offsetting a drop in financials that were hurt by lower U.S. yields.

The Nikkei share average ended 0.7 percent higher to 21,821.16. Last week, the benchmark index slipped 2.6 percent, hit by a drop in oil prices and tech shares.

Analysts said that Nvidia Corp’s dismal earnings, which triggered the tech sell-off, were now priced into the Japanese market, with investors scooping up chip shares on the dips.

Tokyo Electron rose 3.6 percent, Advantest Corp added 2.2 percent and Screen Holdings surged 3.7 percent.

Index-heavyweight SoftBank Group Corp, which tumbled 3.4 percent on Friday because it invests in Nvidia through its Vision Fund, bounced 5.1 percent.

Also supporting sentiment was data showing Japan’s exports rose 8.2 percent in October, reversing the previous month’s decline, analysts said. It was slightly lower than a 9.0 percent increase expected by economists in a Reuters poll.

“Last month, the market had expected a rise in Japan’s exports but they declined, so even though the October data missed market expectations, it was a reversal from the previous month so it was a relief to the market,” said Hikaru Sato, a senior technical analyst at Daiwa Securities.

Elsewhere, knitting machine maker Shima Seiki Mfg. jumped 10 percent after the company said it would buy back up to 1 million of its own shares for up to 4 billion yen.

But banking and insurance tumbled 1.9 percent and 1.5 percent, respectively, after U.S. yields fell when a top U.S. Federal Reserve official said on Friday that U.S. interest rates were not far off the Fed’s estimate of a neutral level, suggesting that the current tightening cycle may soon end.

Sumitomo Mitsui Financial Group sank 2.1 percent to hit a 14-month low, Mitsubishi UFJ Financial Group shed 1.9 percent and T&D Holdings declined 3.5 percent.

Appetite for financial companies, which seek out high-yielding debt, was also soured by the 10-year Japanese Government bond yield dropping to 0.090 percent, its lowest since late August.

The broader Topix advanced 0.5 percent to 1,637.61. (Editing by Shri Navaratnam and Eric Meijer)

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