Japan shares rise on bargain hunting for undervalued stocks, cost woes weigh
TOKYO, Nov 11 (Reuters) – Japanese shares gained on Thursday, as investors were selective and scooped up stocks that were undervalued in comparison to their latest outlooks, while concerns over impact of rising costs on outlook capped gains.
The Nikkei share average rose 0.6% to 29,280.42 by 0153 GMT, after losing as much as 0.2% to track overnight weakness on Wall Street earlier in the session. The broader Topix gained 0.37% to 2,015.34.
Wall Street closed sharply lower overnight as surging consumer prices curbed investor risk appetite, and stoked worries of a protracted wave of red hot inflation.
“Investors bought shares whose prices proven undervalued relative to their latest outlook. We have been seeing a clear contrast in stock prices between those with strong earnings and those without,” said Ikuo Mitsui, fund manager at Aizawa Securities.
“But we can’t see any sign for the end of the global trend of rising costs in materials and transportation, which have been weighing on the investor sentiment.”
Toppan Printing surged 9.01% after the printing company raised its annual outlook. Showa Denko, too, rose 7.29%, as the industrial materials maker returned to profit.
Pacific Metals surged 16.01%, after an activist fund disclosed its holdings in the manufacture of ferronickel.
On the other hand, cosmetics maker Shiseido and brewery Asahi Group Holdings fell 5.82% and 3.25%, respectively, after cutting their annual profit outlook.
Pan Pacific International Holdings tanked 9.21% after the operator of discount stores’ outlook missed market expectations.
There were 145 advancers on the Nikkei index against 71 decliners.
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