Japanese shares rise on strong Wall Street finish, tech stocks shine

TOKYO — Japanese shares extended gains to a third session on Tuesday, as a strong Wall Street finish overnight and expectations of robust corporate earnings lifted sentiment, and as investors snapped up beaten-down technology stocks.

By 0224 GMT, the Nikkei share average advanced 0.7% to 27,199.29, after marking its biggest monthly drop since March 2020 in January. The broader Topix gained 0.64% to 1,908.20.

U.S. stocks closed higher overnight, at the end of a volatile month for Wall Street where the tech-heavy Nasdaq narrowly avoided its worst ever start to the year and the S&P 500 recorded its weakest January performance since 2009.

“After heavy sell-offs in the past two weeks or so, investors have realized that the market outlook was not as bad as they had expected, so they have started buying back stocks but only selectively,” said Koichi Kurose, chief strategist, Resona Asset Management.

Strong corporate outlook ahead of the peak earnings season also boosted investor sentiment, said a market participant.

TDK surged 11.83% and was the top contributor to the Nikkei’s gain after the electronic component maker raised its profit outlook for the second time this year.

Heavyweight chip-making equipment maker Tokyo Electron rose 1.61%.

Shionogi & Co surged 9.34% after a report said the drugmaker’s oral antiviral drug for COVID-19 was found to be effective in a study.

Seven & i Holdings gained 3.9% after Japanese media reported the retailer was considering selling its department unit.

Sony Group gained 1.22% after the game maker announced an acquisition of Bungie Inc, the original creator of the “Halo” videogame and developer of “Destiny,” in a deal valued at $3.6 billion.

The largest percentage loser on the Nikkei was automobile-related products maker NSK with a drop of 10.94%, followed by textile company Toray Industries, which fell 9.28%.

There were 110 advancers on the Nikkei index against 112 decliners. (Reporting by Junko Fujita, additional reporting by Tokyo markets team; Editing by Subhranshu Sahu)