Nikkei rallies on renewed trade hopes, steelmakers shine

* Nikkei up 0.7%, Topix 0.5%
* Steelmakers soar on brokerage upgrade
* Value shares outperform growth shares
* Japan govt stimulus supports cement companies

By Hideyuki Sano
TOKYO, Dec 5 (Reuters) - Japan's Nikkei share average
bounced back on Thursday, with steelmakers leading the gains,
after comments from U.S. President Donald Trump revived optimism
about trade talks between the United States and China.
The Nikkei 225 index .N225 rose 0.71% to 23,300.09, back
above the 25-day moving average of 23,275, a key technical
level.
The broader Topix .TOPX gained 0.48% to 1,711.41, just shy
of the 13-1/2-month high of 1,719.57 hit late last month.
Topix Core 30 .TOPXC , made up of top 30 firms on the main
board, rose 0.43%, hitting a 14-month high.
Trump said negotiations with China were going "very well",
fanning the positive mood sparked after a Bloomberg report that
Washington and Beijing were closer to agreeing how many tariffs
would be rolled back. Steelmakers were the biggest beneficiaries of the latest
surge in optimism, helped by rating upgrades from a brokerage.
The Tokyo Stock Exchange's steel and iron index .ISTEL.T
jumped 4.2%, the biggest gain in 16 months and the top performer
among 33 industry sub-indexes.
Nippon Steel 5401.T soared 6.7%, JFE Holdings 5.2% and
Kobe Steel 5406.T 4.3%.
"Some of those shares are now traded at a P/E of around 40.
It is not clear how much upside there is from here," said
Hiroyuki Fukunaga, the head of Investrust.
Cement companies were another strong performer, also helped
by Prime Minister Shinzo Abe having unveiled a $120 billion
fiscal package.
Taiheiyo Cement 5233.T leapt 5.4% and Sumitomo Osaka
5232.T 4.0%.
Including steelmakers and cement firms, value shares fared
better than growth-oriented shares, with the Topix value index
.TOPXV rising 0.75% compared with a 0.2% gain in Topix growth
.TOPXG .
Many technology shares also rode higher.
Taiyo Yuden 6976.T gained 3.5%, TDK 6762.T 2.5% and
Lasertec 6920.T climbed 2.0% to hit an all-time high.
Murata Manufacturing 6981.T rose 1.6%, helped by a Nikkei
business daily report that the company has developed new
electronic parts to be used for 5G smartphones.
On the other hand, Nintendo 7974.T ended 0.3% lower after
announcing the previous day that it will launch Switch game
consoles next week in China. The shares had already rallied in recent sessions partly on
expectations of such an announcement and hopes of an earnings
boost from it.
The index of Jasdaq start-up firms .NOTC edged up 0.1% to
log its 10th straight day of gains.
Overall trading volume remained tepid, however, with the
main board's turnover hitting just above 2 trillion yen, below
the average over the past year of around 2.21 trillion yen.
Turnover has been below the average for more than a week.