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Japanese shares regain lost ground as growth stocks back in focus

Japanese shares clawed back lost ground to end the morning trade almost flat on Wednesday. (AFP)
Japanese shares clawed back lost ground to end the morning trade almost flat on Wednesday. (AFP)
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10 Jun 2020 01:06:16 GMT9
10 Jun 2020 01:06:16 GMT9

Japanese shares clawed back lost ground to end the morning trade almost flat on Wednesday as investors rushed to buy growth and start-up stocks on continued hopes of a swift recovery from an economic contraction sparked by the coronavirus crisis.

The Nikkei share average edged up 0.1% at 23,115.22, while the broader Topix lost 0.07% to 1,627.35. Earlier in the session, the benchmark index dropped as much as 0.83%.

Both indexes hovered near three-month peaks touched earlier this week.

The rebound came in tandem with gains in U.S. stock futures as hopes of economic recovery after a sharp downturn due to shutdowns continued to underpin the mood.

Takara Bio rose 17.5%, by daily limit, to a seven-year high after the Japanese biotechnology firm said it has developed a method to speed up PCR tests for COVID-19.

The parent company Takara Holdings was the best performer in the Nikkei, with gains of 7.8%.

Growth-oriented shares, which have high valuations because of strong growth expectations, are making a comeback, with the Topix Growth index rising 0.3%. Topix value shed 0.5%.

Among growth shares, Shin-Etsu Chemical rose 2.0%, Astellas Pharma gained 2.0% and Recruit Holdings added 1.3%, while Sony rose 0.8%.

Shares in the Tokyo Stock Exchange's Mothers start-up market also outperformed, with its index rising 1.6% after hitting a 1-1/2-year high.

On the other hand, many of value shares - those with relatively cheap valuations - underperformed following stellar gains in the past couple of weeks.

Constructors fell 1.1% with Shimizu Corp dropping 3.1% and Taisei Corp losing 2.6%.

Steelmakers dropped 1.6%, while insurance companies lost 1.3%, not helped by fall in U.S. bond yields.

Reuters

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