Nikkei up as large cap stocks rebound; growth woes cap gains

TOKYO: Japan's Nikkei rose on Monday, recouping some of the sharp losses seen at the end of last week as investors picked up battered shares, but the upside was curbed by rising concerns over global growth.

The Nikkei share average rose 0.6 per cent to 21,506.88, after it slumped 2 per cent on Friday on the back of grim Chinese data which also knocked Wall Street.

"The market seems to be digesting concerns about global growth and some of these worries have been priced into the market for now," said Toru Ibayashi, executive director of Wealth Management at UBS Securities Japan


However, analysts said investors are still cautious about further signs of a slowdown in global growth - a factor reflected in the underperformance of the Topix, which only rose 0.1 per cent to 1,594.20.

Declining issues outnumbered advancing ones 1,420 to 648.

"Large cap stocks were the main losers on Friday, so investors bought back as selling is thought to be overdone," said Hikaru Sato, a senior technical analyst at Daiwa Securities. "But mid-to-small cap stocks are still struggling as investors are still reluctant to go long for the overall market."

Machinery and technology shares gained after selling off on worries about China's weak retail growth and industrial output data.

Advantest Corp jumped 2.1 per cent, while Tokyo Electron and TDK Corp both gained 1.8 per cent.

Weaker oil prices lifted utility shares on hopes of lower costs. Tokyo Electric Power Co gained 3.0 per cent and Chubu Electric Power Co added 1.9 per cent.

On the other hand, mining stocks lost ground. Inpex Corp fell 1.7 per cent.

The weak China data fanned worries about lower fuel demand in the world's biggest oil importer, sending oil prices down about 2 per cent on Friday before they edged up in Asian trade on Monday.

Bucking the stronger market, discount children's wear operator Nishimatsuya Chain nosedived 8.6 per cent after the company cut its full-year net profit forecast by 42 per cent to 3.33 billion yen ($29.3 million) for the year ending February due to weak sales of baby clothes.

Office supply company Askul Corp tumbled 6.5 per cent after its pre-tax profit dropped 54.5 per cent on year to 958 million yen for the first half ended November hit by rising delivery costs amid driver shortage.