TOKYO, Oct. 4 (Xinhua) -- Japan's benchmark Nikkei stock index closed sharply higher Tuesday amid Wall Street's overnight rally.

The 225-issue Nikkei Stock Average jumped 776.42 points, or 2.96 percent, from Monday to close the day at 26,992.21.

The broader Topix index, meanwhile, leapt 59.31 points, or 3.21 percent, to finish at 1,906.89.

Local brokers said that Wall Street's three major indexes all advancing more than 2 percent overnight provided the impetus for investors here to snap-up bargains, especially heavily-weighted components like Fast Retailing and SoftBank Group.

"Investors scooped up shares that were beaten down, especially heavyweights and growth stocks. The market was also underpinned by the strong finish of Wall Street," Maki Sawada, a strategist at Nomura Securities, was quoted as saying.

Dealers here also said the market mood was also brightened by reports the British government has opted to scrap plans to cut income tax for top earners.

The controversial planned tax cuts had been part of a package of unfunded tax cuts that had wreaked havoc on financial markets and sent the pound plummeting to record lows.

"The reports provided relief to investors, but effects are likely to be temporary as inflation is not expected to abate soon, while Tokyo stocks have surged quite rapidly," Masahiro Ichikawa, chief market strategist at Sumitomo Mitsui DS Asset Management Co., was quoted as saying.

By the close of play, wholesale trade, mining, and oil and coal product issues comprised those that gained the most, and rising issues outpaced falling ones by 1,777 to 52 on the Prime Market, while seven ended the day unchanged.

Nikkei heavyweights finding favor included technology investor SoftBank Group leaping 5.1 percent, chip-making equipment maker Tokyo Electron adding 2.7 percent, while Uniqlo clothing chain operator Fast Retailing ended up 2 percent.

Energy issues were bought following crude oil futures rising after the Organization of the Petroleum Exporting Countries and its allies (OPEC+) said it is considering reducing supply by 1 million barrels per day.

As a result, oil exploration giant Inpex climbed 5.4 percent, refiner Japan Petroleum Exploration Co. jumped 3.4 percent, while Eneos Holdings ended 4.0 percent higher.

Department store issues gained on hopes for increased patronage, with Isetan Mitsukoshi Holdings adding 3.9 percent, while Takashimaya also closed in positive territory, gaining 3.2 percent.

On the Prime Market on Tuesday, 1,378.66 million shares changed hands, rising from Monday's volume of 1,269.34 million shares.

The turnover on the second trading day of the week came to 3,229.35 billion yen (22.31 billion U.S. dollars). Enditem

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