Thursday, 09 July 2015 12:26
TOKYO: Tokyo stocks swung into positive territory by the close on Thursday as Beijing moved to stop a hair-raising drop in Chinese shares that sparked a regional sell-off and fuelled fears about the country’s economy.
The Nikkei 225 index at the Tokyo Stock Exchange, which tumbled more than three percent at the start, rose 0.60 percent, or 117.86 points, to close at 19,855.50.
The broader Topix index of all first-section issues pared earlier losses to end 0.16 percent, or 2.59 points, lower at 1,579.89.
Japan’s biggest exchange reversed course as Shanghai stocks jumped more than five percent in afternoon trade as China’s market regulator barred major shareholders and executives of listed companies from selling their shares for the next six months.
The move marked the latest government action to stem a slide that has wiped trillions off valuations.
On Wednesday, Shanghai plunged 5.90 percent, after losing more than eight percent at one point, while Hong Kong tanked 5.84 percent in a sell-off that rippled across regional markets, including Japan, which has strong trading links with China.
Mainland Chinese stocks have plunged more than one-third in the last few weeks, unwinding a strong bull run that saw it put on more than 150 percent in the year through mid-June.
“Tokyo markets have been affected by Chinese shares since yesterday,” said Hideyuki Suzuki, general manager of Investment Market Research at SBI Securities.
But the reversal in Chinese markets “offered a sense of relief”, he said, as investors focus on a European Union summit Sunday.
European leaders ordered Athens to file a complete reform plan by midnight (2200 GMT) on Thursday, with European President Donald Tusk saying the “final deadline” for a bailout deal would be Sunday’s meeting.
In share trading, Toshiba dropped 2.12 percent to 386.3 yen following a report it may sell assets worth 200 billion yen ($ 1.7 billion), including part of its stake in atomic power plant maker Westinghouse Electric.
Uniqlo chain operator Fast Retailing jumped 4.13 percent to 57,460 yen ahead of the announcement of its third-quarter financial results.
Honda edged down 0.07 percent to 3,832 yen in a muted reaction to news that it was recalling another 4.5 million vehicles globally, as a scare over a deadly airbag defect widens.
The fault has been linked to at least eight deaths globally.
On currency markets the dollar was at 121.43 yen, up from 120.71 yen in New York though still off the 122 yen level earlier this week.
