Japan’s Nikkei share average edged up on Tuesday after posting its second-biggest daily drop this year, but the market remained concerned after a collapse in Greek bailout talks intensified fears that the country could exit the euro zone.
The Nikkei share average rose 0.2 percent to 20,159.18 by mid-morning after tumbling 2.9 percent on the previous day, the biggest daily drop since January.
Greece will not pay a 1.6 billon euro loan instalment due the International Monetary Fund on Tuesday, a Greek official told Reuters, after talks between Athens and its creditors broke down over the weekend when Prime Minister Alexis Tsipras called a surprise referendum on the austerity plan.
“Both bullish investors and bearish investors have the same scenario about Greece’s fate, but in any event, the country needs to be rescued and cannot survive on its own,” said Takatoshi Itoshima, chief portfolio manager at Commons Asset Management.
He said that as long as there is no contagion to other parts of Europe, there should be no panic in the market.
“Right now most people want to stay on the sidelines and see the referendum (on July 5).
“Traders said investors are also cautious on Chinese markets, which have plunged more than 20 percent in the last few weeks, posing a fresh threat to the country’s cooling economy.
Outperforming the market was Nitori Holdings, which jumped 5.1 percent after the discount furniture store operator reported better-than-expected earnings for the March-May quarter.
Its sales rose 1.7 percent to 119.2 billion yen, while its operating profit dropped 5.3 percent on year to 20.8 billion due to increased personnel cost, but was still above the company’s estimate.
Shionogi & Co soared 7.7 percent and was the third biggest percentage gainer on the main board after Credit Suisse hiked its rating to ‘outperform’ from ‘neutral’.
Credit Suisse’s analyst wrote in a report that even as the cholesterol-lowering drug Crestor approaches its U.S. patent expiry date in July 2016, Shionogi is expected to report sales and earnings growth for three consecutive years starting from this fiscal year ending March 2016.
The broader Topix gained 0.1 percent to 1,626.76 and the JPX-Nikkei Index 400 rose 0.2 percent to 14,684.88.