Nikkei posts biggest gain in 21 months on lower oil prices

The Nikkei index recorded its highest points gain since June 2020 after briefly jumping more than 1,000 points on Thursday as investors welcomed an overnight drop in crude oil futures that had soared amid the Ukrainian crisis.

The 225-number Nikkei Stock Average ended up 972.87 points, or 3.94%, from Wednesday at 25,690.40. The broader Topix index of all issues in the first section on the Tokyo Stock Exchange ended 71.14 points, or 4.04%, up at 1,830.03.

All industry categories gained ground, led by shipping, air transportation and consumer credit issues.

A financial tip in Tokyo shows the Nikkei stock index gained more than 1,000 points at some point on March 10, 2022. (Kyodo)

Shares soared early on as worries about high oil prices dissipated following reports that the Organization of the Petroleum Exporting Countries and its allies could raise production targets, allaying worries about negative impact on the global economy.

The Nikkei index briefly jumped 1,002.78 points, or more than 4%, closing with its biggest point gain since June 16, 2020.

Other commodity futures followed the fall in crude oil, further easing concerns about soaring inflation and its negative effect on corporate earnings, analysts said.

“A temporary lull in the uptrend in crude oil futures eased fears of runaway inflation, while an overnight rally on Wall Street also prompted investors to buy back stocks,” he said. Masahiro Ichikawa, chief market strategist at Sumitomo Mitsui DS Asset Management Co.

Market participants searched for a wide range of stocks in active trades, scooping up battered stocks after the benchmark Nikkei lost more than 1,800 points in the past four trading days due to l continued uncertainty over Moscow’s invasion of Ukraine, analysts said.

Sentiment was also boosted by significant gains in Chinese stock markets, Ichikawa added.

However, markets are expected to remain volatile as investors focus on talks between Russia and Ukraine later in the day amid Moscow’s ongoing offensive, analysts said.

On the first section, advancing shows outnumbered declining shows by 2,140 to 30, while 10 ended unchanged.

Air travel problems soared as falling oil futures raised hopes that damage to the sector would be limited.

ANA Holdings jumped 120.5 yen, or 5.5%, to 2,319.0 yen and Japan Airlines jumped 126 yen, or 6.7%, to 1,996 yen.

Export-oriented issues increased following the weakening of the yen against the US dollar. Electronic component makers TDK gained 145 yen, or 3.9%, to 3,890 yen and Kyocera advanced 242 yen, or 4.0%, to 6,318 yen.

Trading volume on the main section rose to 1,504.03 million shares from 1,500.51 million shares on Wednesday.

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Felix J. Dixon