Nikkei surges, Toshiba jumps on cost cuts

Japan’s Nikkei surged on Thursday, tracking a rally in Wall Street after US midterm elections produced no major surprises.

The Nikkei share average rose 1.8 per cent to 22,481.58 points by midmorning trade, after hitting a 2-1/2-week high of 22,583.43 earlier.

The US midterm election results were as the market expected; a split Congress with Democrats winning control of the House of Representatives and Republicans cementing their majority in the Senate.

Analysts said investors were buying back stocks on optimism that US President Donald Trump’s corporate tax cuts, which have lifted corporate profits, will continue, reports Reuters.

All but one of the Topix’s 33 subsectors were in positive territory. The broader Topix rose 1.8 per cent to 1,681.43. Advancing issues outnumbered declining ones 1,851 to 225, reports AP.

Suruga Bank jumped 20 per cent to a daily limit-high after Reuters reported that the bank is expected to post a net loss of around 50 billion yen ($440.02 million) for the first half, compared to a net profit of initially-expected 12 billion yen, citing a person with direct knowledge.

Traders said that retail investors, who had sold the stock when they first speculated that the bank would post a loss, were covering their short positions after they got an indication about the size of the loss.

Toshiba Corp soared 5.0 per cent after the Nikkei business daily said that the company’s next five-year plan features $1.8 billion in cost cuts.

Inpex Corp gained 5 per cent after the mining company raised its net profit forecast to 60 billion yen from 48 billion yen for the year ending March 2019.

It also hiked its annual dividend payout forecast to 24 yen per share from 18 yen per share.