Nikkei ends higher on robust Chinese exports, rising US stock futures

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TOKYO: Japan’s Nikkei changed course and ended higher on Friday as investors took heart from gains in Chinese shares on upbeat Chinese export data, triggering buying in manufacturers exposed to China.

The Nikkei share average gained 0.5 per cent to 22,694.66 after falling as much as 1.2 per cent early in the day. On Thursday, the index slid 3.9 per cent.

For the week, the Nikkei shed 4.6 per cent, its biggest weekly drop since March.

China reported on Friday an unexpected acceleration in export growth in September and a record trade surplus with the United States, which could exacerbate an already-heated dispute between Beijing and Washington.

Rising US futures during Asian trade also underpinned sentiment. S&P mini futures and Dow mini futures both rose 1 per cent.

“Investors were relieved to see a turnaround in Chinese shares and indications that the US market will open higher later in the day,” said Tsuyoshi Horota, general manager at SMBC Nikko Securities.

“Investors who were shorting earlier wanted to unwind their positions before the weekend.”

The Nikkei Volatility Index, a widely followed barometer of expected near-term volatility, eased to 25.42 on Friday after jumping on Thursday from 18.36 to 27.52, a level not seen since March.

Industrial machinery makers, which have been battered lately on worries about slowing Chinese demand, recovered. Yaskawa Electric soared 5.6 per cent and Fanuc gained 2.4 per cent.

Construction equipment makers that rely on Chinese demand also gained ground. Komatsu added 2.3 per cent and Hitachi Construction Machinery 2.7 per cent.

The insurance sector underperformed and was the biggest loser on the board, falling 2.5 per cent. Last month, it rose 8.6 per cent.

Traders said global investors were seen taking profits, while Thursday’s sharp selling in such US insurers as Prudential Financial and American International Group also dampened the mood in the sector.

Dai-ichi Life Holdings dropped 2.7 per cent to 2,288 yen. Last week, it reached 2,457.5 yen, its highest since January. Sompo Holdings, which hit a record high last month, fell 3.6 per cent.

Convenience store operator Lawson Inc stumbled 6.2 per cent after posting an 11.5 per cent drop in operating profit for the March-August on investment costs.

The broader Topix was flat at 1,702.45.

Source: Economic Times