October 15, 2019 / 6:36 AM / 8 months ago

Nikkei hits 5-1/2-month high after U.S.-China talks show progress

* Shippers, chip-related shares jump

* Constructors, home appliance makers rise after typhoon damages

By Hideyuki Sano

TOKYO, Oct 15 (Reuters) - Japan’s Nikkei share average rose nearly 2% on Tuesday to its highest since late April, in a delayed response to a potential U.S.-China trade deal outlined by President Donald Trump last week.

Investors also bid up construction shares after Typhoon Hagibis caused widespread damage in central and eastern Japan.

Reopening after a market holiday on Monday, the Nikkei rose 1.87% to 22,207.21 points, its biggest daily gain in more than a month.

The broader Topix gained 1.56% to 1,620.20, near a five-month closing high of 1,623.27 touched on Sept. 26.

Trump on Friday outlined the first phase of a deal to end a trade war with China and suspended a threatened tariff hike, but officials on both sides said much more work needed to be done before an accord could be agreed.

Shippers, sensitive to global demand and developments in the U.S.-China trade war, jumped 2.9%, with Kawasaki Kisen rising 5.8% and Mitsui OSK Lines 3.3%.

Semi-conductor related shares also soared.

Silicon wafer maker Sumco rose 5.3%, while Shinetsu Chemical gained 2.6% to 20-month highs.

Screen Holdings, maker of semiconductor manufacturing machines, rose up to 3.5% to hit a one-year high. Rohm also scaled a year high and ended 4.5% higher.

Industrial robot manufacturer Fanuc jumped 2.9%.

The construction sector gained 2.4%. Kitano Construction, based in Nagano, one of the worst hit areas by the typhoon, rose 13.2%.

Household appliance makers were also helped by hopes of fresh demand for goods such as refrigerators and washing machines.

Hitachi rose 2.7% while Panasonic gained 2.2% despite damage to one of its factories. Suzuki Motor , manufacturer of light automobiles, gained 4.4%.

SoftBank Group climbed 2.5% after media reports that SBG has prepared a financing package for WeWork Companies Inc that would give it control over the shared office space company

Elsewhere, Ryohin Keikaku, operator of “Muji” brand stores, soared 8.3%, extending its rally after its June-Aug earnings beat market expectations last week.

Insurers gained despite the damaging typhoon, with Tokio Marine up 2.1%, MS&AD 2.4% and Sompo Japan 2.1%.

Despite broad gains on Tuesday, many investors remained cautious on the trade outlook due to a dearth of details on the agreement between the United States and China.

“The market mood has changed but the trade situation hasn’t actually changed much,” said Masayuki Doshida, senior market analayst at Rakuten Securities. (Reporting by Hideyuki Sano; Editing by Jane Wardell & Kim Coghill)

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