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Nikkei edges up to 7-yr closing high, chip shares up

Nikkei edges up to 7-yr closing high, chip shares up
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First Published: Thu, Jun 21 2007. 03 11 PM IST
Updated: Thu, Jun 21 2007. 03 11 PM IST
Eriko Amaha/Reuters
Tokyo: The Nikkei nudged up 0.16% to its highest close in seven years on 21 June as chip-related stocks such as Tokyo Electron rose on surging DRAM chip prices, while Mitsubishi Corp. and others seen benefiting from the global economic expansion climbed.
Elpida Memory Inc., Japan’s sole maker of DRAM chips, jumped 4.4% to 5,720 yen and Toshiba Corp., which makes NAND flash memory, hit its highest since September 2000 before ending up 2% at 1,002 yen.
“The chip market may have been bottoming out, and the cheap yen is also a help. Investors are buying shares of electronics companies that have forecast strong growth this year,” said Yoshinori Nagano, chief strategist Daiwa Asset Management.
Electronics firms listed on the Tokyo Stock Exchange’s first section expect an average 18% rise in recurring profit for the year to next March, against a growth forecast of 6% for firms in all sectors, according to Shinko Research Institute Co. Ltd.
The Nikkei share average rose 28.62 points to 18,240.30, the highest close since May 2000. The benchmark has advanced for six straight sessions. The broader TOPIX index rose 0.32% to 1,789.38.
Kazuhiro Takahashi, general manager at equity marketing department Daiwa Securities SMBC Co. Ltd, said the market could aim higher ahead of the Bank of Japan’s quarterly “tankan” corporate sentiment survey due on 2 July.
“The market could aim not only for this year’s high of 18,300 but even for 18,500 on growing hopes that the tankan survey would show strong corporate sentiment,” he said.
Tokyo saw active trade with 2.2 billion shares changing hands, compared with a daily average volume of 2.2 billion shares in May. Advancers beat decliners 954 to 634.
BRICS beneficiaries
Trading firms, steel and nonferrous stocks were among the most actively traded issues for their profit prospects.
“The companies that export their products to BRICs nations are the major draw in the market. When their share prices go overboard, investors go somewhere else, but they always come back to these stocks,” Yasuo Yabe, director of sales at Meiwa Securities, referring to Brazil, Russia, India and China (BRIC).
Trading firm Mitsubishi surged 4.6% to 3,400 yen, Nippon Steel Corp., Japan’s largest steel maker, added 1.2% to 882 yen, and Sumitomo Metal Mining Co. Ltd jumped 3.4% to 2,715 yen.
Ishikawajima-Harima Heavy Industries (IHI), Japan’s third-biggest heavy machinery maker, climbed 3.4% to 456 yen on a news report it planned to boost its capacity to make low-pressure turbine discs for the jet engines that General Electric Co. makes for Boeing Co.
Separately, IHI’s president told Reuters on 20 June the company planned to boost its output capacity for turbochargers, which are used primarily in diesel engines, in Europe and Asia to meet growing demand there.
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First Published: Thu, Jun 21 2007. 03 11 PM IST
More Topics: Nikkei | Money Matters | Global Markets |