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Nikkei rallies to 29-year high, Honda leads carmakers on upbeat earnings

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Hideyuki Sano
·2 min read
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By Hideyuki Sano

TOKYO, Nov 9 (Reuters) - Japan's Nikkei share average on Monday reached a high last seen almost three decades ago, after Joe Biden secured a victory in the U.S. Presidential election, with Honda Motors leading gains among carmakers after strong quarterly numbers.

Investors, who had held off buying last week due to U.S. political uncertainty, are rushing to buy as they focus on Biden's ability to expand fiscal stimulus and measures to reduce the spread of COVID-19.

The Nikkei hit an intraday high of 24,678.62, breaking above its 2018 peak of 24,448 to reach its highest level since November 1991. The broader Topix also gained 0.77% to 1,671.32, a level last seen in late February.

Honda Motor jumped as much as 9% after the carmaker revised up its earnings outlook.

Transport equipment maker index gained 2.8% with Toyota Motor Corp, which announced its earnings on Friday, also extending gains by 2.8%.

"Corporate earnings are recovering more than expected. It also means a lot for the Japanese market that car makers are showing a strong recovery," said Takuya Hozumi, global investment strategist at Mitsubishi UFJ Morgan Stanley Securities.

"In addition, Eastern Asian shares, including Japan, were helped by the relatively contained level of coronavirus infections," he added.

Sushiro Global jumped 12% after the sushi restaurant chain operator reported a better-than-expected profit in the July-September quarter, recovering from a slump triggered by the epidemic in the preceding quarter.

Renewable energy-related firms also soared following Biden's victory. Renova gained 6.6% while West Holdings jumped 10% and Erex rose 7.3%.

On the other hand, Japan Airlines fell as much as 15.5% to touch its lowest level since its listing in 2012 after the company floated its plans to sell new shares to raise about $1.6 billion. Rival ANA also felt the heat and dropped 3.5%.

Eisai dived 24% after a panel to U.S. regulator voted that a potential Alzheimer's treatment from the firm and Biogen Inc has not been proven to slow progression of the disease. (Editing by Sherry Jacob-Phillips)