Get 40% Off
🤯 This Tech Portfolio is up 29% YTD! Join Now to Get April’s Top PicksGet The Picks – Just 99 USD

Japanese shares snap winning streak; Mothers index at 1-yr high

Published 05/21/2020, 03:42 PM
Updated 05/21/2020, 03:50 PM
© Reuters.

© Reuters.

By Hideyuki Sano
TOKYO, May 21 (Reuters) - Japan's Nikkei share average
snapped a four-day winning streak on Thursday, as investors were
reluctant to chase markets after the benchmark hit a 2-1/2-month
high, raising concerns that stocks were potentially overvalued.
The Nikkei share average .N225 closed 0.21% lower at
20,552.31. Earlier in the session, the index rose to as high as
20,734.91, its strongest level since March 6. The broader Topix
.TOPX lost 0.23% to 1,491.21.
Although the market has rallied on hopes of a quick economic
recovery following countries' move to ease coronavirus
restrictions, investors have noted the market's valuations are
getting stretched.
The Nikkei has rallied 8.6% so far this quarter after
suffering a 20% loss in the previous quarter on worries about
severe economic damages from the COVID-19 pandemic.
The Topix is traded at 14 times its expected earnings,
sharply higher than the trough of 10.6 touched in March and near
last year's peak of 14.4.
The turnover of the Tokyo Stock Exchange's main board has
fallen below 2 trillion yen to the lowest level in almost a
month, another sign of a lack in strong convictions among
investors to chase the market higher.
The Japanese government is expected to lift its state of
emergency later in the day in three prefectures around Osaka,
the country's second-biggest urban area after Tokyo, and might
take similar steps for Tokyo by the end of month. As more people are expected to work from home even after the
end of emergency, railway companies are expected to lose revenue
from commuting and business travels, while cosmetic companies
are bracing for a drop in sales.
Railway operator Tokyu Corp 9005.T , Keio 9008.T , East
Japan Railway 9020.T all lost about 2.4% each, while Central
Japan Railway 9020.T shed 1.6%.
Cosmetic maker Shiseido 4911.T slumps 1.8%.
"Trading on winners and losers from the coronavirus will be
our main course of actions," said Hisashi Iwama, fund manager at
Asset Management One.
"Even though some shares now look bubbly, this polarisation
could continue further for the time being.
On the other side of the spectrum, I'rom Group 2372.T rose
21.1% by the daily limit after the bio-tech firm said its
coronavirus vaccine development project won a backing from a
public research body.
The index of Mothers .MTHR , a start-up market in the Tokyo
Stock Exchange, climbed 1.9% to a one-year high, with Anges
4563.T , which is also seeking to develop a coronavirus
vaccine, rising 12%.
Elsewhere, Taiheiyo Cement 5233.T gained 12.8% and Sompo
Holdings 8630.T rose 7.1% following their share buyback
announcements.

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.