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Nikkei bounces back from 8-month low on bottom fishing in auto shares

08/22/2021 | 10:47pm EDT

TOKYO, Aug 23 (Reuters) - Japan's Nikkei share average jumped on Monday after plumbing an eight-month low in the previous session, as auto-related stocks rebounded from losses stoked by Toyota Motor's announcement that it would slash its global production by 40% in September.

The Nikkei rose 1.7% to 27,485.90 by 0205 GMT, as bargain-hunters rushed into buying after it hit its lowest level since late December on Friday.

The broader Topix gained 1.97% to 1,917.78, led by a 3.5% surge in the transport equipment index.

The sub-index fell more than 10% last week - a massive drop that typically happens only during extreme market turmoil such as the one in early 2020 - after Toyota's announcement shocked investors.

The fall provided bargain-hunting opportunities for investors who think the impact of Toyota's output cut would be short-lived and that last week's selling was overdone.

Toyota rebounded 3.2%, while Denso jumped 6.8% and Nissan Motor rose 3.4%.

All of the TSE's 33 industry sub-indexes were in the black, with highly volatile shippers shares up 4.3% after last week's sharp drop.

Electric machinery shares also marked a stellar gain of 2.8%, with Keyence, Sony < 6758.T>, and Hitachi rising 4.1%, 3.8% and 2.7% respectively.

On the other hand, SoftBank Group lost 1.5% after its plan to sell British chip designer ARM to Nvidia Corp hit a major hurdle as a UK regulator found it could damage competition and weaken rivals, and required a further lengthy investigation. (Reporting by Hideyuki Sano; Editing by Subhranshu Sahu)

© Reuters 2021
Stocks mentioned in the article
ChangeLast1st jan.
DENSO CORPORATION 3.16% 8152 End-of-day quote.32.90%
HITACHI, LTD. 0.07% 6688 End-of-day quote.64.53%
KEYENCE CORPORATION -0.71% 67220 End-of-day quote.15.90%
NISSAN MOTOR CO., LTD. 0.34% 589.8 End-of-day quote.5.32%
NVIDIA CORPORATION 1.65% 222.22 Delayed Quote.67.46%
SOFTBANK GROUP CORP. -0.83% 6238 End-of-day quote.-22.59%
TOYOTA MOTOR CORPORATION 2.33% 2040 End-of-day quote.28.19%
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