September 13, 2018 / 7:01 AM / 2 months ago

Nikkei soars as Sino-U.S. trade talk hopes lift stocks sensitive to China demand

* Topix Core 30 index posts biggest daily pct gain in a month

* Construction equipment makers rise on trade talk hopes

* Apple-related stocks fall

* Chip stocks continue to weaken after U.S. counterparts sold

By Ayai Tomisawa

TOKYO, Sept 13 (Reuters) - Japan’s Nikkei rallied to near two-week highs on Thursday as news of a proposed fresh round of trade talks between China and the United States lifted risk appetite, triggering buying in stocks which are exposed to Chinese demand.

The Nikkei share average soared 1.0 percent to 22,821.32, the highest closing level since August 31.

The Trump administration has reached out to China for a new round of trade talks as it prepares to activate punitive U.S. tariffs on $200 billion worth of Chinese goods, according to two people familiar with the matter.

“Investors are welcoming this news because Japan has become Trump’s target which has been pressuring sentiment,” said Takashi Ito, an equity market strategist at Nomura Securities. “Although the situation is nowhere near close to resolution yet, this news is serving as a reason to buy.”

A second round of trade talks between Japanese Economy Minister Toshimitsu Motegi and U.S. Trade Representative Robert Lighthizer is reported to have been scheduled for Sept. 21 in the United States.

Investors’ main concern is whether Japan can avert steep tariffs on the cars it exports to the United States, analysts said.

The broader Topix index outperformed the Nikkei, surging 1.1 percent to 1,710.02. The Topix Core 30 index jumped 1.4 percent, the biggest daily percentage gain in a month.

Companies which have a large exposure to the Chinese market advanced. Industrial robot maker Fanuc Corp rose 1.0 percent, construction equipment maker Komatsu Ltd surged 1.7 percent and Hitachi Construction Machinery jumped 2.7 percent.

These companies, which depend greatly on demand from China, have been sold on Trump’s trade-related comments against Beijing over the past few months.

Apple suppliers were sold after the iPhone maker’s shares declined 1.2 percent overnight when it unveiled a larger iPhone but made few other changes to its lineup.

Murata Manufacturing shed 1.3 percent, Alps Electric stumbled 4.8 percent and TDK Corp plunged 3.9 percent.

Chip-related stocks continued to weaken, tracking overnight selling in U.S. counterparts such as Micron Technology which tumbled 4.3 percent. Advantest Corp dropped 5.4 percent and Tokyo Electron declined 3.0 percent.

Reporting by Ayai Tomisawa Editing by Eric Meijer

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