TOKYO: Japanese shares rose on Wednesday as markets cautiously eyed the US presidential election results, while gains were capped as voting projections showed a tight race between President Donald Trump and Democratic challenger Joe Biden.

The benchmark Nikkei share average rose 1.72% to close at 23,695.23, after rallying more than 2% in early trade to its highest level since February.

The broader Topix gained 1.2% to 1,627.25.

Renova, a company engaged in renewable energy generation business, fell 6.36%.

Leading gains among the top 30 core Topix were Recruit Holdings Co Ltd up 5.16 %, followed by Daiichi Sankyo Co Ltd.

Among the largest percentage gainers in the index were Fujikura Ltd up 27.92%, followed by NTT Data Corp gaining 11.04 % after both firms logged better-than-expected earnings results for the fiscal year ending March.

Elsewhere, the Mothers Index of start-up firm shares snapped four consecutive sessions of losses and jumped more than 5.3%, marking its biggest daily gain since early May. Investors had initially priced in a possible Democratic sweep by Biden, which could ease political risk while promising a huge boost to fiscal stimulus.

But gains were capped as worries of a contested election returned after Trump took the lead over Biden in the vital battleground of Florida and other US swing states.

“While the outcome is still not concrete, stocks seem to be moving in the direction of pricing in a higher probability of a Trump win,” said Fumio Matsumoto, chief strategist at Okasan Securities. Incoming election results “indirectly took Japan’s renewable energy-related stocks lower,” such as Renova, Matsumoto said.

“Although Biden’s (clean energy) plan does not have direct link to Japan, there were speculations that a Biden presidency would lead to Japan’s shift from coal-fired thermal power to renewable energy,” he said.—Reuters