Wave of Heavy Buying Boosts Tokyo Stock Index Up 5.17%

A round of buying snowballed Monday on the Tokyo Stock Exchange, driving the market’s key index up 5.17% to its highest closing since late December.

The 225-issue Nikkei stock average rose 868.77 points to 17,686.47--the largest single-day gain in points since a 1,013.35-point, or 6.12%, climb last Aug. 27.

Volume shot up to the highest since early September, with an estimated 550 million shares changing hands on the first section, up from 270 million Friday. Advances overwhelmed declines 1,035 to 60, with 55 issues unchanged.

The Tokyo stock price index of all issues listed on the first section gained 52.59 points, or 4.15%, to 1,320.91. On Friday, it had climbed 2.20 points, or 0.17%.

Traders said investors were buying because of strength in the futures market, Saturday’s approval of the government’s fiscal 1993 budget in parliament, expectations of greater public works spending and speculation that more money from public pension funds would flow into the market.

With share prices rising, players who had oversold stocks in anticipation of declines began aggressive buying, they added.

Kazuyuki Suzuki, a dealer with Daiwa Securities Co., said buying by public pension funds contributed to Monday’s gains.