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Nikkei rallies to 3-month high as U.S.-China worries ease for now

Published 01/06/2020, 03:56
Updated 01/06/2020, 04:00
© Reuters.
JP225
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SOX
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TOPX
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7735
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8035
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6857
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ISECU.T
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ISHIP.T
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MTHR
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SYDNEY, June 1 (Reuters) - Japanese stocks rose to a
three-month high on Monday, as U.S. President Donald Trump's
threats against China over new security laws for Hong Kong were
less threatening than feared.
The benchmark Nikkei average .N225 gained 1.2% to
22,135.75 by the midday break, a high last seen in late
February.
The rally was led by short-covering as some investors had
worried Trump could ditch his trade deal with China or call an
immediate end to privileges to Hong Kong after the Chinese
parliament passed new security legislation for the
semi-autonomous city last week. Investors are now focused on the global economic recovery as
more countries gradually move to re-open their economies -- the
main driving force of the market's rally since late March.
Clouding the outlook, however, are jitters over protests and
riots in many U.S. cities after an unarmed black man died in
police custody in Minneapolis last week. Highly cyclical securities brokerages .ISECU.T and
shippers .ISHIP.T were among best-performing sectors on the
main bourse, up 2.3% and 1.8%, respectively.
Chipmaking-related stocks also did well after the U.S.
Philadelphia semiconductor index .SOX gained 2.7% on Friday on
hopes of strong demand related to new technologies such as 5G
wireless communications.
Screen Holdings Co Ltd 7735.T climbed 5.3%, while Tokyo
Electron 8035.T rose 4.1% and Advantest Corp 6857.T jumped
6.4%.
Elsewhere, the index of Mothers start-up shares .MTHR
advanced as much as 2.0% to clear the 1,000 mark for the first
time since early December 2018.
The broader Topix .TOPX edged up 0.5% to 1,571.34 though
decliners outnumbered gainers by a ratio of 54 to 46.

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