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Tokyo stocks edge up after China stimulus, NEC dives on profit cut

Tokyo stocks edge up after China stimulus, NEC dives on profit cut

TOKYO: Tokyo shares edged up by the close Tuesday after China announced fresh stimulus, while NEC’s stock plunged on news the information technology giant was cutting its operating profit forecasts.

The benchmark Nikkei 225 index had lingered in negative territory for most of the session after weak manufacturing figures from China and disappointing Japanese capital spending deflated investor spirits.

Worries about China boosted the yen a perceived safe haven in times of turmoil which initially took the wind out of the Nikkei as the stronger currency threatened Japanese exporters’ profitability.

But the Japanese unit eased in afternoon trading with the dollar ticking up to 112.75 yen from 112.72 yen late Monday in New York, while the euro was up at 122.71 yen against 122.59 yen.

“Market sentiment is on its way toward a recovery, but the slightest bad news can still rock it,” Toshihiko Matsuno, chief strategist at SMBC Friend Securities, told Bloomberg News.

At the closing bell, the Nikkei was up 0.37 percent, or 58.75 points, to end at 16,085.51, while the broader Topix index of all first-section shares was up 0.23 percent, or 2.98 points, at 1,300.83.

Investor sentiment got a boost after China’s central bank said that it would cut the proportion of funds banks must set aside as reserves, in Beijing’s latest attempt to tackle slowing growth in the world’s second-largest economy.

But hours after the announcement, fresh Chinese data showed that manufacturing activity in Asia’s top economy — a key driver of global growth — in February shrank at its fastest rate in four years.

In Japan, official data pointed to slowing corporate spending, defying government efforts to stoke activity and boost growth.

The world’s number three economy contracted in the last quarter of 2015 and the outlook for growth is tepid, despite a tight labour market.

The nation’s unemployment rate slipped to 3.2 percent in January from 3.3 percent in December, fresh data showed Tuesday.

In Tokyo trading, NEC plunged 11.18 percent to 254 yen, after the technology firm downgraded its earnings forecast for the fiscal year to March, citing slumping sales and lost business.

Automaker Nissan fell 1.26 percent to 1,011.5 yen after surging more than five percent Monday on news that it will buy back billions of dollars worth of its stock.

Among the gainers, mobile carrier SoftBank rose 0.84 percent to 5,621 yen and Panasonic was up 0.44 percent to close at 958.5 yen.

Copyright AFP (Agence France-Presse), 2016

Courtesy : BRecorder



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