Nikkei gains but on track for worst month in 15 months

SYDNEY, March 31 (Reuters) – Japanese stock benchmark Nikkei gained on Tuesday as Wall Street stabilised and factory data from China held out the hope of a rebound in activity, even though the global coronavirus crisis showed no signs of abating.

The Nikkei share average rose 0.8% to 19,233.50 by the midday break.

For the month, the index was down 9.0% and on track for its biggest monthly decline in 15 months. The benchmark was down 18.7% year-to-date, set for its worst quarter since late 2008.

The Nikkei’s volatility index, a measure of investors’ volatility expectations based on option pricing and considered to be a fear gauge, shed 13.8% to 48.10, moving away from a nine-year peak of 60.86, hit on March 16.

Market sentiment got a boost from Chinese factory activity data which unexpectedly expanded in March after contracting sharply to a record low in February.

China’s official manufacturing purchasing managers’ index (PMI) bounced to 52.0 in March, the National Bureau of Statistics (NBS) said on Tuesday, up from a record-low of 35.7 in February, and topping analysts’ forecast of 45.0.

The broader Topix added 0.3% to 1,439.67 by the midday recess, with oil and coal products sector leading the gain.

Major oil refiners JXTG Holdings Inc and Idemitsu Kosan Co Ltd rose 4.4% and 3.6%, respectively, after oil prices recovered some ground on Tuesday as the United States and Russia agreed to discuss stabilising energy markets.

As Tokyo was seen moving closer toward a potential citywide lockdown over the coronavirus pandemic, shares of remote work-related firms and gamemakers rose.

Web/TV conferencing services provider V-cube Inc soared 13.3%.

Nintendo Co Ltd gained 3.1%, Square Enix Holdings Co Ltd rose 3.4%, and Capcom Co Ltd added 2.9%.

Fujifilm Holdings Corp jumped 6.6% after the business daily Nikkei reported the company planned to increase production of its Avigan anti-flu drug, also known as favipiravir.

Fujifilm stocks climbed 6.0% on Monday after Prime Minister Shinzo Abe said the government would push for approval of the drug as a potential coronavirus treatment. (Reporting by Tomo Uetake; Editing by Vinay Dwivedi)

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