The Nikkei 225 rose sharply in the morning on the back of strong US corporate earnings, but pared its gains in the afternoon on the 21st to finish higher for the first time in 3 days.
The Nikkei 225 opened sharply higher from the previous day, and buying to cover short positions spread mainly among leading stocks shortly after the open. It was briefly up more than ¥1,300 in the morning, but after the initial buying subsided, it came under selling from investors waiting to sell into a rebound and traded with narrower gains. Although it struggled further toward the close, it still finished higher for the first time in 3 days. The market was reportedly supported by the strength of US stocks and strong corporate earnings.
Trading volume on the TSE Prime Market, an indicator of overall market activity, was approximately 2.17903 billion shares, while trading value was approximately ¥6.9265 trillion. By sector, nonferrous metals, banks and insurance stocks rose, while retail, pulp and paper, and mining stocks declined slightly. Approximately 63.2% of all stocks rose and 33.5% fell, indicating that buying to cover short positions remained the dominant trend.
Many individual stocks rose across a range of sectors. Advantem, SoftBank Group, Ibiden, Tokyo Electron, TDK and others attracted buying, while KDDI, Fast Retailing, Nitori Holdings and Kao declined. The differing trends between the morning momentum and the afternoon session combined to produce a broad market rebound.