October 12, 2018 / 7:07 AM / 4 days ago

Nikkei ends higher on robust Chinese exports, rising U.S. stock futures

* Nikkei falls 4.6 pct for week, biggest weekly drop since March

* Insurance sector slides 2.5 pct after soaring 8.6 pct in Sept

* Nikkei volatility eases after the spike on Thursday

By Ayai Tomisawa

TOKYO, Oct 12 (Reuters) - Japan’s Nikkei changed course and ended higher on Friday as investors took heart from gains in Chinese shares on upbeat Chinese export data, triggering buying in manufacturers exposed to China.

The Nikkei share average gained 0.5 percent to 22,694.66 after falling as much as 1.2 percent early in the day. On Thursday, the index slid 3.9 percent.

For the week, the Nikkei shed 4.6 percent, its biggest weekly drop since March.

China reported on Friday an unexpected acceleration in export growth in September and a record trade surplus with the United States, which could exacerbate an already-heated dispute between Beijing and Washington.

Rising U.S. futures during Asian trade also underpinned sentiment. S&P mini futures and Dow mini futures both rose 1 percent.

“Investors were relieved to see a turnaround in Chinese shares and indications that the U.S. market will open higher later in the day,” said Tsuyoshi Horota, general manager at SMBC Nikko Securities.

“Investors who were shorting earlier wanted to unwind their positions before the weekend.”

The Nikkei Volatility Index, a widely followed barometer of expected near-term volatility, eased to 25.42 on Friday after jumping on Thursday from 18.36 to 27.52, a level not seen since March.

Industrial machinery makers, which have been battered lately on worries about slowing Chinese demand, recovered. Yaskawa Electric soared 5.6 percent and Fanuc gained 2.4 percent.

Construction equipment makers that rely on Chinese demand also gained ground. Komatsu added 2.3 percent and Hitachi Construction Machinery 2.7 percent.

The insurance sector underperformed and was the biggest loser on the board, falling 2.5 percent. Last month, it rose 8.6 percent.

Traders said global investors were seen taking profits, while Thursday’s sharp selling in such U.S. insurers as Prudential Financial and American International Group also dampened the mood in the sector.

Dai-ichi Life Holdings dropped 2.7 percent to 2,288 yen. Last week, it reached 2,457.5 yen, its highest since January. Sompo Holdings, which hit a record high last month, fell 3.6 percent.

Convenience store operator Lawson Inc stumbled 6.2 percent after posting an 11.5 percent drop in operating profit for the March-August on investment costs.

The broader Topix was flat at 1,702.45. (Reporting by Ayai Tomisawa; Editing by Richard Borsuk)

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