Nikkei bounces back from 8-month low on bottom fishing in auto shares
TOKYO, Aug 23 (Reuters) – Japan’s Nikkei share average jumped on Monday after plumbing an eight-month low in the previous session, as auto-related stocks rebounded from losses stoked by Toyota Motor’s announcement that it would slash its global production by 40% in September.
The Nikkei rose 1.7% to 27,485.90 by 0205 GMT, as bargain-hunters rushed into buying after it hit its lowest level since late December on Friday.
The broader Topix gained 1.97% to 1,917.78, led by a 3.5% surge in the transport equipment index.
The sub-index fell more than 10% last week – a massive drop that typically happens only during extreme market turmoil such as the one in early 2020 – after Toyota’s announcement shocked investors.
The fall provided bargain-hunting opportunities for investors who think the impact of Toyota’s output cut would be short-lived and that last week’s selling was overdone.
Toyota rebounded 3.2%, while Denso jumped 6.8% and Nissan Motor rose 3.4%.
All of the TSE’s 33 industry sub-indexes were in the black, with highly volatile shippers shares up 4.3% after last week’s sharp drop.
Electric machinery shares also marked a stellar gain of 2.8%, with Keyence, Sony < 6758.T>, and Hitachi rising 4.1%, 3.8% and 2.7% respectively.
On the other hand, SoftBank Group lost 1.5% after its plan to sell British chip designer ARM to Nvidia Corp hit a major hurdle as a UK regulator found it could damage competition and weaken rivals, and required a further lengthy investigation. (Reporting by Hideyuki Sano; Editing by Subhranshu Sahu)