Roundup: Japan’s Nikkei ends slightly higher despite unexpected economic decline

TOKYO, Nov. 15– Japan’s benchmark Nikkei stock index closed marginally higher Tuesday, despite data showing an unexpected economic contraction in the third quarter, while banking stocks found favor. “Appetite for Japanese stocks is getting stronger as investors see them as a bargain,” Chihiro Ohta, assistant general manager of the investment research and…

TOKYO, Nov. 15 (Xinhua) — Japan’s benchmark Nikkei stock index closed marginally higher Tuesday, despite data showing an unexpected economic contraction in the third quarter, while banking stocks found favor.

The 225-issue Nikkei Stock Average added 26.70 points, or 0.10 percent, from Monday to close the day at 27,990.17.

The broader Topix index, meanwhile, gained 7.32 points, or 0.37 percent, to finish at 1,964.22.

Local brokers said along with banking-linked issues advancing, bargain-hunting investors sought out issues that had recently been beaten down.

“Appetite for Japanese stocks is getting stronger as investors see them as a bargain,” Chihiro Ohta, assistant general manager of the investment research and investor services at SMBC Nikko Securities, was quoted as saying.

Market strategists said data released on Tuesday showed Japan’s economy unexpectedly shrank for the first time in four quarters in the July-September period, as the yen’s tumble to decade lows further inflated soaring import and living costs.

According to the Cabinet Office, the economy contracted an annualized 1.2 percent in the recording period, with the shocking decline compared to median economists’ expectations for growth of 1.1 percent on the heels of a revised 4.6 percent expansion logged in the second quarter.

Some leading economists maintain that in the first half of 2023, Japan will slip into a mild recession amid a global slowdown that will hit the country’s exports.

By the close of play, bank, pharmaceutical, and nonferrous metal issues comprised those that gained the most.

With Mizuho Financial Group and Sumitomo Mitsui Financial Group reporting robust second-quarter earnings, the banking sector got a boost on Tuesday.

“Bank issues lifted the market in the absence of major trading cues,” Shingo Ide, chief equity strategist at the NLI Research Institute was quoted as saying.

Sumitomo Mitsui Financial Group jumped 4.2 percent, while Mizuho Financial Group added 1.1 percent by the close.

Nikkei heavyweight SoftBank Group bounced back, gaining 1.3 percent after plunging a day earlier when announcing hefty losses related to its Vision Fund investment unit.

Recruit Holdings dropped 6.7 percent. Despite its net profit rising on-year in the April-September period, the increase still missed median market expectations.

Issues that rose outpaced those that fell by 1,091 to 678, while 67 ended the day unchanged.

On the Prime Market, 1,211.30 million shares changed hands on Tuesday, dropping from Monday’s volume of 1,460.35 million shares.

The turnover on the second trading day of the week came to 3,170.73 billion yen (22.73 billion U.S. dollars). Enditem

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