Tokyo stocks soared Tuesday as recovering oil prices and receding oversupply concerns brightened sentiment, while the yen's depreciation against the U.S. dollar lifted export-related shares.
The 225-issue Nikkei Stock Average ended up 598.49 points, or 3.68 percent, from Monday at 16,874.44. The broader Topix index of all First Section issues on the Tokyo Stock Exchange finished 42.88 points, or 3.25 percent, higher at 1,363.03.
Every industry category on the main section gained ground led by banking, marine transportation, and insurance issues.
Tokyo stocks opened sharply higher after plunging the previous day, as the rebound in oil prices erased steep losses that occurred after negotiations among major oil producing nations to freeze output at current levels failed over the weekend.
Reports on Monday that Kuwait has been forced to reduce its oil output due to a workers' strike at an oil industry facility boosted sentiment, increasing hopes that the glut of crude supply may ebb, brokers said.
"The recovery in oil prices and receding oversupply concerns have helped lift sentiment," said Maki Sawada of Nomura Securities Co.
Sawada said oil prices continue to be a focal point for the global market. "There has been a strong correlation between oil prices and stocks this year. When crude prices are up, the market becomes risk-on."
Shingo Ide, chief equity strategist at the NLI Research Institute, said that the yen weakening against the dollar also supported the Tokyo stock market, lifting export-oriented shares and easing concerns about the outlook for corporate profits.
But Ide also described the current tone in the market as "neutral."
"While stocks have bounced fiercely, investors are not quite that optimistic yet. It is going to take some more good news for shares to be propelled higher and retake the 17,000 line again," he said.
On the First Section, advancing issues trounced declining ones 1,792 to 118, while 42 ended the day unchanged.
Resource-related shares jumped on stabilizing oil prices, with Japan Drilling climbing 136 yen, or 5.9 percent, to 2,438 yen, and Showa Shell gaining 40 yen, or 3.8 percent, to 1,081 yen.
Among export-related shares, Mazda Motor surged 113.00 yen, or 7.2 percent, to 1,683.50 yen and Sony vaulted 177.50 yen, or 6.5 percent, to 2,913.50 yen.
Idemitsu Kosan rose 69 yen, or 3.4 percent, to 2,123 yen after the major oil refiner firm said Monday that it will enter the Vietnamese market by establishing a petroleum product distribution company there with Kuwait Petroleum International Ltd.
DIC gained 10 yen, or 3.9 percent, to 266 yen after the Nikkei business daily reported Tuesday that the major ink manufacturer is set to record a year-on-year increase in its consolidated operating profit for the January-March period.
Trading volume on the main section fell to 2,097.97 million shares from Monday's 2,182.06 million shares.
==Kyodo
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