Nikkei gains as trade tensions ease; Apple suppliers, chip-related shares outperform

Published 20/08/2019, 07:56
© Reuters.  Nikkei gains as trade tensions ease; Apple suppliers, chip-related shares outperform
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By Tomo Uetake

TOKYO, Aug 20 (Reuters) - Japan's Nikkei rose for a third

straight day on Tuesday as investors tiptoed back into equities

amid signs of a slight easing of trade tensions between the

United States and China.

Hopes for fresh stimulus moves by major economies also

boosted riskier assets.

On Monday, Washington extended a reprieve that permits

China's Huawei Technologies HWT.UL to buy components from U.S.

companies by 90 days, to supply existing customers. The Nikkei share average .N225 rose 0.6% to 20,677.22

points, while the broader Topix .TOPX added 0.8% to 1,506.77.

"It's like an extension of yesterday's rally -- largely

buoyed by short-covering although the moves seemed to lack

strong conviction," said a Tokyo-based investment manager.

Investors were growing cautious ahead of the U.S. Federal

Reserve's Jackson Hole symposium and G7 (Group of Seven) summit

later in the week, he said.

On Wall Street, all three major stock indexes gained

overnight, with Apple AAPL.O jumping 1.9% to provide the

biggest boost to the Nasdaq. .N/C

That helped Tokyo-listed Apple suppliers, with Taiyo Yuden

6976.T and TDK Corp 6762.T rising 1.6% and Foster Electric

6794.T advancing 1.4%.

After speaking with Apple's chief executive Tim Cook on

Sunday, U.S President Donald Trump said the CEO "made a good

case" that tariffs could hurt Apple, given that Samsung's

products would not be subject to those same tariffs. Tokyo-listed chipmaking-related firms also got a boost after

the U.S. Philadelphia semiconductor index .SOX climbed 1.9% on

Monday as Huawei's U.S. chip suppliers, such as Micron

Technology MU.O , rose.

Semiconductor manufacturing equipment maker Screen Holdings

7735.T surged 5.4% and chipmaking equipment supplier Tokyo

Electron 8035.T rallied 1.4%.

Rate-sensitive TSE REIT index .TREIT rose 0.3%, extending

its winning streak to an eighth day to hit its fresh 12-year

highs since 2007. Real estate .IRLTY.T was the best performing sector among

the Tokyo market's 33 subindexes, with both Mitsui Fudosan

8801.T and Mitsubishi Estate 8802.T up 1.7%.

Hopes for additional stimulus helped sentiment after media

reports said Germany is prepared to increase fiscal spending,

and after the People's Bank of China took steps to lower

corporate borrowing costs by setting a new lending reference

rate. Turnover on the Tokyo Stock Exchange's main board was thin

at 1.58 trillion yen, well below its daily average of 2.33

trillion yen over the past year.

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