Nikkei hits 14-month high; value stocks jump on trade deal bets

By Hideyuki Sano
TOKYO, Dec 13 (Reuters) - Japan's Nikkei share average
jumped to a 14-month high on Friday, boosted by gains in value
stocks such as banks and steelmakers on hopes of a U.S.-China
trade deal heralding robust global growth.
The Nikkei 225 index .N225 surged 2.55% to end at
24,023.10, hitting its highest levels since October last year
and marking its biggest daily gain in 10 months.
The index made a decisive break above a resistance around
23,600. Its next target is seen at 24,448, a 27-year peak marked
on Oct. 2 last year.
The broader Topix .TOPX gained 1.59% to 1,739.98 in heavy
volume, with turnover reaching 3.442 trillion yen ($31.68
billion), the highest level this year.
The United States has agreed to suspend some tariffs on
Chinese goods and reduce others, sources said, in return for
Beijing's pledge to hike purchases of U.S. farm products in
2020. "Markets weren't expecting the U.S. to reduce the existing
tariffs, so if that is true, that would be an additional
surprise," said Hiroyuki Ueno, senior strategist at Sumitomo
Mitsui Trust Asset Management.
Investors rushed to buy value stocks, which have been left
undervalued compared to growth stocks that have high valuations
because of strong growth expectations, betting that a Sino-U.S.
trade deal could stabilise the global economy and benefit many
companies rather than a selected few.
Financial shares, long hit by low and negative interest
rates, saw sharp gains, with banking sector index .IBNKS.T
gaining 2.6% and insurer index .IINSU.T rising 2.3%.
The country's top three banking groups — Mitsubishi UFJ
8306.T , Sumitomo Mitsui Financial Group 8316.T and Mizuho
8411.T — rose more than 2%.
Among insurers, Tokio Marine 8766.T rose 2.3% to a record
high, while Dai-ichi Life 8750.T gained 3.5%.
Other "old economy" shares also outperformed, with
non-ferrous metals .INFRO.T rising 3.2% and shipping companies
.ISHIP.T adding 2.9%.
On the other hand, chip-related shares, which have risen in
recent weeks on signs of a bottoming-out of the highly volatile
technology sector, climbed further on the trade news.
Tokyo Electron 8035.T jumped 5.9%, while Yaskawa Electric
6506.T added 5.4% and Shin-etsu Chemical 4503.T advanced
4.3%.
Chip-making equipment maker NuFlare Technology 6256.T
gained 11.7% after Hoya Corp 7741.T announced a counter-bid
for the firm.
Toshiba Corp 6502.T owns 52.4% of NuFlare and has said it
hopes to buy the rest of the company in a corporate
restructuring. Kura Sushi 2695.T dropped 4.1% after the sushi restaurant
chain operator reported a larger-than-expected fall in earnings
in the financial year ended October and gave a soft guidance for
the current year.


($1 = 108.6400 yen)