Nikkei Breaks Losing Streak After Wall Street Recovery

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The stock exchange in Tokyo ended Thursday with a profit, breaking an eight-day loss series. Investors took to the recovery on Wall Street, which welcomed a Republican proposal to raise the debt ceiling into December with relief.

 

The ongoing deadlock in Washington over raising the debt ceiling has been gripping markets for weeks. If the limit is not lifted before October 18, the United States could no longer meet its financial obligations.

The leading Nikkei in Tokyo closed 0.5 percent in the plus at 27,678.21 points. The tech companies have picked up again after the recent heavy price losses in the sector. Robot manufacturer Fanuc gained more than 1 percent, and chip equipment maker Tokyo Electron rose almost 2 percent. The Japanese supermarket chain Aeon, on the other hand, fell more than 5 percent after disappointing results. Japan Post Holdings fell 0.7 percent after the Japanese government announced it wanted to sell about 1 billion shares of the postal company. To mitigate the impact of the sale, the company will buy back its own shares.

In Hong Kong, the Hang Seng index advanced 2.7 percent. The major Chinese tech companies Tencent and Alibaba were among the strongest climbers with more than 5 percent gains. Chinese Estates, a former major shareholder of the struggling Chinese real estate group Evergrande, made a price jump of more than 30 percent after a takeover bid for the company. Solar Bright wants to take the project developer off the stock exchange for about 212 million euros. Solar Bright is owned by the family of Joseph Lau, the largest shareholder of Chinese Estates and former chairman of the company.

Trading in Evergrande stock is still on hold, pending important news from the ailing company. US Secretary of State Antony Blinken has warned China to deal with the crisis at Evergrande “responsibly”. According to Blinken, the group’s bankruptcy could cause a domino effect within the Chinese real estate sector and have far-reaching consequences for the entire world. In China, the stock markets have been closed all week because of the so-called Golden Week in the country. However, the Shanghai stock exchange will reopen on Friday.

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